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A leading economist is warning that job creation in the U.S. economy is slowing to a crawl as the ongoing government shutdown precluded the release of the September jobs report last week.
Moody’s Analytics chief economist Mark Zandi wrote Sunday in a post on X noting that the shutdown forestalled the release of the September jobs report from the Bureau of Labor Statistics (BLS) as scheduled on Friday, which caused data watchers to focus on private data reports in the absence of the BLS’ data.
“While not a replacement, there are good private sources of jobs data,” Zandi wrote and noted Revelio Labs develops a report estimating job growth using professional networking sites like LinkedIn as a reference point. “The data show that employment increased by 60k in September, almost entirely concentrated in the education and healthcare sector.”
“Even this paltry gain likely overstates things, as Revelio’s data has been revised significantly lower of late, as more data comes in. Also of note, the job growth last month was almost exclusively in California, New York, and Massachusetts,” he noted.
THE SEPTEMBER JOBS REPORT IS DELAYED BY THE GOVERNMENT SHUTDOWN- WHAT WAS IT EXPECTED TO SHOW?
Zandi pointed to last week’s private jobs report from ADP, which showed a decline of 32,000 jobs in September, with job gains concentrated in the healthcare sector at very large companies.
He noted that smaller companies “are getting hit hardest by the tariffs and restrictive immigration policies,” while the overall economy likely saw a larger than reported decline because “government employment surely also fell in the month given the ongoing DOGE-related cuts.”
“Averaging the Revelio and ADP employment estimates for September suggest that there was essentially no job growth during the month,” he wrote.
PRIVATE SECTOR LOST 32,000 JOBS IN SEPTEMBER, ADP SAYS
“Other job market data back this estimate up, including the Conference Board’s jobs easy versus hard to get questions in its monthly consumer confidence survey. It fell and is now as low as it has been since coming out of the pandemic in early 2021. There’s no better predictor of changes in unemployment, which thus likely rose again in September,” Zandi added.
“The bottom line is that not having the BLS jobs data is a serious problem for assessing the health of the economy and making good policy decisions. But the private sources of jobs data are admirably filling the information gap, at least for now. And this data shows that the job market is weak and getting weaker,” Zandi wrote.
FED’S GOOLSBEE SAYS CENTRAL BANK HAS OTHER DATA OPTIONS IF SHUTDOWN DISRUPTS ECONOMIC REPORTS
The BLS’ September jobs report that was slated to be released on Friday before the government shutdown began on Wednesday was expected to show a gain of 50,000 jobs, according to economists polled by LSEG. Additionally, the unemployment rate was estimated to remain unchanged at 4.3%.
Once the government shutdown ends, the BLS is expected to release the September jobs report – although it may not immediately follow the resumption of government funding as the agency will likely need some time to complete the report before publication.
