Okay, the headline here is the last time I use the “exceeded expectations” line to make fun of the post-election spin about Ken Cuccinelli’s incredible victory in Virginia on Tuesday.
But the headline’s true: almost nobody thought the October Jobs Report would show a net gain of 204,000 jobs; the consensus prediction was 120,000 with some late estimates lower than that. BLS also upwardly revised the August and September estimates by a total of 60,000 jobs. Not too shabby.
But the numbers will be called into question because BLS treated furloughed government workers as employed for purposes of calculating net new jobs but then as unemployed for calculating the unemployment rate, which unsurprisingly rose to 7.3%. Indeed, Justin Wolfers showed the effect of the furloughs in a tweet this morning, and in another suggested the furloughs should have probably boosted the unemployment rate more than they actually did.
The numbers create a bit of a quandary for Republican spinmeisters. They would normally ignore the net new jobs number and emphasize the higher unemployment rate. But that would draw attention to the impact of the furloughs, while also sacrificing the chance to argue that the robust jobs numbers show the government shutdown didn’t harm the economy (a very questionable assumption since the indirect effects on contractors and suppliers probably wouldn’t show up in jobs reports until a bit further down the line).
All in all, we’ll probably see less hype about this report from either side of the political battle lines than would typically be the case. But the higher official unemployment figure could be reassuring to those fearing a “tapering” of Fed stimulus, since the stimulus program has been advertised as ending only when the unemployment rate is down significantly.