After a 2 ½ -week delay, the government on Tuesday will issue the September employment report, providing a snapshot of the job market’s health before the 16-day partial government shutdown.
The report will help answer some questions about the direction the economy was headed. The government was unable to issue most data during the shutdown.
Still, the jobs report is carrying less weight than usual. That’s because the shutdown has likely slowed growth and hiring. And the September figures are certain to be revised two weeks later, when the government reports on October hiring.
Economists forecast that Tuesday’s report will show employers added 180,000 jobs in September, according to FactSet. That would be up from August’s gain of 169,000. The unemployment rate is expected to have stayed at 7.3 percent.
The job market has stumbled in recent months, after having started the year with some promise. Employers added an average of just 155,000 jobs a month from May through August. In the first four months of the year, they added an average of 205,000.
Even if there’s a bump in September hiring, many economists are predicting a drop in October. That’s because furloughs of federal workers and private government contractors may lower the payroll figures. But that could be a temporary decline and not reflective of broader hiring patterns.
Many economists say they won’t have a clear read on hiring and unemployment until the November jobs report is released, in early December.
And there’s also the potential for another budget confrontation in just three months. That’s because the government was only reopened until Jan. 15. But economists said that shouldn’t drag too heavily on hiring in November and December.
“We’ve been dealing with these sorts of deadlines for quite a while now,” said Dean Maki, chief U.S. economist at Barclays. “It’s not a new source of uncertainty in that sense.”
The deceleration in job growth was a key reason the Federal Reserve decided in September to hold off on slowing its $85-billion-a-month in bond purchases. The lack of clean data could lead the Fed to push off any decision on the bond purchases until 2014. The bond purchases are intended to keep long-term interest rates low, encouraging more borrowing and spending.
There are some signs that other parts of the economy are starting to improve, particularly those affected by Europe’s economic troubles. The region is growing again, and that has given a slight boost to U.S. manufacturers.
Factory output was improving before the shutdown, according to private sector reports, one reason that economists forecast steady job gains last month. Factory activity expanded at the fastest pace in 2 ½ years in September, according to a survey by the Institute for Supply Management.
Other reports delayed by the shutdown are also trickling out, including August data on job openings and the trade deficit, to be issued Thursday. Next week, closely watched data on September retail sales and consumer prices will be released.