Much as been said recently about the effects of the government shutdown on our national economic standing. Within days of the shutdown, Standard & Poor’s spelled out $24 billion dollar blow to the head that our friends in the House of Representatives had delivered to us all. We’ve all heard reports saying the glitches in HealthCare.gov would cost anywhere from $70 million dollars to $500 million dollars to fix, so it’s reasonable to assume that if the Republicans had not forced the shutdown and we had instead used the money to fix the Obamacare website, we would have saved billions.
But there are other less obvious affects from the GOP shutdown of 2013 and they’re being highlighted in today’s release of the October jobs report.
Take for instance, last month’s 7.3% unemployment rate. In a report just published in Huffington Post, Mark Gongloff writes:
“This month, in trying to measure the effects of the pointless and destructive government shutdown in October, the household survey (one of two survey’s used by the government in determining the unemployment rate) decided to count furloughed federal workers as unemployed by reason of a temporary layoff. In the chart below you can see the big jump in October in the percentage of unemployed people who were only sidelined temporarily.”
In other words, the GOP furloughed government workers raised the unemployed level to 7.3%, thereby making the President look bad, and therefore, making the Republicans happy. Gongloff further broke it down this way:
“Ian Lyngen, bond-market strategist at CRT Capital in Stamford, Conn., estimates this temporary layoff effect added 0.3 percentage points to the unemployment rate. In other words, the “clean” unemployment rate without the government shutdown would have been 7 percent, which is a lot better than 7.3 percent.”
Now let’s look at the other part of the jobs report that is just plain misleading. The report also shows an additional 204,000 jobs were created in October. The TEA party guys are gleefully shouting from the rooftops that their shutdown has actually helped the US economy, proving their theory that government only screws up the free market. But the truth is, most of those jobs were actually the Federal jobs that were in a “furloughed state”. So, firing the government workers, opened up all of their jobs! TEA party logic at it’s finest!
The third part of the new jobs report looks at the percent of Americans actively seeking a job (the labor participation rate). That figure had dropped almost a full percentage point from the September numbers. Shocking!! The TEA party is now saying, “see, we told you Obama’s policies are not working!” But they’re not talking much about why this phenomenon occurred. Again, those furloughed Federal workers were not looking for a job during their “unemployment”.
The bottom line is today’s jobs numbers are likely to be spun like an old sock in the spin cycle by both sides. But the real story is, the October jobs report is skewed and totally useless in evaluating growth or regression in our economy. So, less usable data? The TEA folks don’t like facts anyway, so to them. they WON! I’m playing the part of Coach Lee Corso this time, saying only, “Not so fast, my friend!”