October 30, 2013
That’s nice, but what about October’s U.S. jobs report?
Statistics Canada has reported that 12,000 net new jobs were created in the land of the red maple leaf in September.
Canada’s year-to-date change in employment has been +113,000, while the gain over the same month last year has reached 213,000.
The jobless rate north of the border has tightened to 6.9% from 7.1% the month before.
The last time the figure was below 7.0% occurred in December 2008, at 6.8%. Its highest level in the latest recession was 8.7%, recorded in August 2009.
On account of the “kerfuffle” over Obamacare and the debt ceiling debate that caused a partial shutdown of the government in Washington, the comparable U.S. employment figures have been delayed for several weeks and now they’re seriously out of date.
The just-published U.S. Bureau of Labor Statistics’ Employment Situation synopsis for September shows a net gain in jobs of 148,000, with the unemployment rate staying flat versus August at 7.2%.
A year ago, the U.S. unemployment rate was 7.8%.
Through the first nine months of this year, the U.S. has added 1.6 million new jobs. Compared with September of last year, the increase has been 2.2 million.
In the latest month, the number of workers in construction rose by 20,000, almost the same as occurred in retail trade, +21,000.
The payroll of manufacturers stayed about constant, only +2,000.
The government sector added 22,000 positions, all at the state level. The local government employment change of -6,000 was exactly matched by cuts at the federal level.
The latter number might see a much sharper drop when October’s numbers are released. Furloughs won’t be counted as job losses, but there was a high level of ancillary cuts as a result of wide-spread ripple effects.
A figure that will be watched with a great deal of interest in the months ahead, as hospitals and medical offices increasingly adjust to the roll-out of the Affordable Care and Patient Protection legislation, is employment in the “health” sector. In the latest month, the net change was +7,000.
September’s total employment increase of nearly 150,000 was weaker than many analysts’ expectations, but there’s a simple explanation. Hiring decisions were surely postponed in light of uncertain political developments that, at the time, were in worrisome flux.
As it turned out, employers were correct to be hesitant. The cost to the economy of the partial shutdown has been estimated at close to $20 billion.
Now we’ll have to wait, not just for October’s labour market report — which is likely to be bleak — but more important, to see whether or not there will be a bounce-back in November.
The Federal Reserve had been expected to begin tapering its stimulatory bond-buying program some time towards the end of this year. The next meeting of the decision-making Federal Open Market Committee (FOMC) is set for the end of October.
It’s most unlikely there will be any change in policy at that time. It’s almost a given that the final meeting of the FOMC in December will also adopt a stand-pat position until both the political and economic outlooks become clearer.
Unfortunately, there is still no assurance October’s opening 16 days won’t be mirrored during the countdowns to the next three critical deadlines.
On Dec. 15, a report is due from the bipartisan committee set up to fix the budget, through some combination of spending cuts (i.e., entitlement changes) and/or tax increases.
On Jan. 15, the step-back-from-the-brink congressional approval of day-to-day government financing will run out again.
And on Feb. 7, the temporary relaxation of the debt ceiling will expire.
Senior Republicans are adamant they won’t allow another attempt by their more conservative wing to close down the government.
In the colourful words of Mitch McConnell, Republican from Kentucky and Senate Minority Leader, there is “no education in the second kick of a mule”.
Polling results show the American public’s tolerance for another go-around that would result in excessive job anxiety would be next to zero.
Politicians’ approval ratings have fallen inordinately low and need to be repaired.
Senator Ted Cruz (Republican, Texas) — chief architect of the shutdown, Tea Party “de facto” leader and “green eggs and ham” narrator during a famous filibuster — remains unrepentant.
He has a “what if” scenario he likes to tell anyone who will listen.
What if most Republicans in the Senate hadn’t opted for compromise with their colleagues in the Democratic Party?
What if they’d stayed hard line and supported his stand instead?
Never mind the damage that was being done to the economy nor the loss of U.S. prestige internationally on account of flaunting the possibility of default.
Why stop there?
What if everybody supposedly came to their senses and supported him?
Then maybe he’d win his wings and be able to fly.