October Jobs Report Belies Obama Claim that the Shutdown Hurt the Economy
The White House is making some startling claims about the government shutdown's cost to the economy.
Essentially, evil Republicans have sabotaged growth and cost tens of thousands of jobs:
October's 16-day government shutdown will cut into fourth-quarter GDP growth by 0.2 to 0.6 percentage points, according to a report released Thursday from the White House Office of Management and Budget. That hit to GDP is in line with many economists' estimates. The shutdown also meant 120,000 fewer private-sector jobs created in the first two weeks of October.
If those projections are correct, it could mean the shutdown delivered a meaningful blow to the national economy. Third-quarter GDP growth was at 2.8 percent, the Commerce Department reported Thursday. Even if that pace holds steady through the fourth quarter, it could mean that the shutdown brought moderate economic growth down to more sluggish levels.
Likewise, a subtraction of 120,000 private-sector jobs could bring October job growth to a crawl. September's job growth was only at 148,000, and average monthly job growth for 2013 is at roughly 178,000. However, consensus estimates for private job growth in October stand at 128,000, according to Bloomberg. More data on how the shutdown affected the October jobs numbers will come Friday morning, when the Labor Department releases the October employment report.
The White House also estimates it paid $2 billion to furloughed employees for their days off the job, and that the total compensation bill, including benefits like health insurance, came to $2.5 billion.
OMB Director Sylvia Mathews Burwell told reporters in a Thursday afternoon conference call that those estimates are "conservative."
"It does not represent the total cost, because the other thing it does not cover is all the preparation leading up to and what happened post [shutdown]," she said.
Unfortunately for the White House, this scary report came out a day before the actual jobs numbers were released. Given that the BLS reported that 202,000 jobs were created in October, does anyone seriously believe that the shutdown cost us another 120,000 jobs for the month? That would mean that October's "actual" numbers would have been 322,000.
For the record, the highest number of jobs created in a month during Obama's time in office was 241,000 in April of this year.