The September jobs report was delayed by the government shutdown. Jobs report misses expectations

A new jobs report released on Tuesday showed the economic recovery continues to be sluggish, and many economists warn that the constant fiscal fights in Washington threaten to make the situation only worse.

The U.S. economy added 148,000 jobs in September while the unemployment rate dropped slightly to 7.2 percent, federal economists reported Tuesday. The report fell short of expectations — economists surveyed by Bloomberg had estimated the number of jobs added would come in at 185,000.


“It’s a soft report,” Mark Zandi of Moody’s Analytics said on CNBC. “The worrisome thing is this is September — this is before the shutdown effects and the brinkmanship effects, and it feels like we’re going into [October] with not a lot of momentum.”

The September jobs report was delayed by the government shutdown because most of the staff at the Bureau of Labor Statistics were furloughed by the time it was originally set to be released on Oct. 4.

Analysts say the shutdown could cloud the value of the next two monthly reports, meaning that a clear picture of the jobs market may not appear until the December report is released in January.

“The October survey will be compromised by the late survey and the unquantifiable indirect private-sector job losses triggered by the shutdown, and the November numbers will be compromised by the recovery — we hope — of these same jobs,” said Pantheon’s Ian Shepherdson. “It won’t be possible to know exactly what the payroll numbers would have been in either month, absent the shutdown.”

The White House said Tuesday that it estimates the shutdown will have led to 120,000 fewer jobs being created while cutting fourth-quarter gross domestic product by 0.25 percent.

“What we did in October was a self-inflicted wound that will subtract from jobs when we eventually learn the jobs number for October,” said Council of Economic Advisers Chairman Jason Furman.

Analysts have already been trying to figure out how much of a dent the shutdown put in the economy. Standard & Poor’s estimates that the shutdown will cost the economy $24 billion, shaving fourth-quarter GDP growth by 0.6 percent.

And many analysts say it’s contributed to an overall sense of consumer uncertainty that could slow down economic growth over the remainder of the year.

While experts say it’s normal for consumer uncertainty to spike during political fiscal fights, the frequency at which those fights are occurring is hindering economic growth.

“This has both near- and long-term economic implications, keeping productivity growth weak for longer,” said Moody’s analyst Ryan Sweet. “Uncertainty also weighs on consumer psyche as well and has led them to spend cautiously.”

The White House used the release of the latest employment numbers to call for an end to the recent fiscal standoffs.

“While job growth remained solid in September, there is no question that the focus of policy should be on how to achieve a faster pace of job growth by increasing certainty and investing in jobs, rather than the self-inflicted wounds of the past several weeks that increased uncertainty and inhibited job growth,” Furman said in a blog post.

Republicans used the report to slam the president’s economic policies.

“Today’s report shows the president has more than a troubled website to fix — he has a troubled economy, weakened by years of failed ‘stimulus’ policies and excessive red tape,” Speaker John Boehner (R-Ohio) said in a release.

The monthly jobs report is being closely watched by the Federal Reserve, which is deciding when to begin scaling back its economic stimulus programs. The central bank’s policymaking committee next meets Oct. 29 to Oct. 30.

Most analysts believe the central bank will hold off on changing its monetary policy course for a few more months, in part, because of the damage done to the economy by the shutdown and the last-minute negotiations over raising the government’s borrowing limit.

“Given the government shutdown, October’s payrolls are likely to be weak, too,” said Paul Ashworth, chief U.S. economist for Capital Economics. “That means unless November’s gain turns out to be over 300,000, it now looks like the Fed could delay tapering until early next year.”

Tuesday’s report also contained revisions to the jobs numbers released for July and August. The July employment gains were revised from 104,000 to 89,000 while the August number was revised from 169,000 to 193,000.

The percentage of Americans working or searching for work is 63.2 percent — unchanged from September, and still the lowest it’s been since 1978. And 36.9 percent of the unemployed — 4.1 million people — have been jobless for at least 27 weeks, down about 725,000 during the past year.

The jobs number has a margin for error of plus or minus 100,000 jobs, while the unemployment rate has a margin for error of about plus or minus 0.2 percent.

Jennifer Epstein and Ben White contributed to this report.