The result of the American government closure … the labor market in the fog circle

In a development that reflects the fragility of the political and economic situation in the United States, the federal government closure has disrupted the publication of one of the most important monthly economic reports, which is the job report on September, usually issued by the American Labor Statistics Office (BLS).

The data was scheduled to be issued on Friday morning at 8:30 East time, but it was completely absent as the office stopped working. Thus, investors and economists find themselves in front of a statistical vacuum in one of the most sensitive indicators for global markets. In the absence of official data, analysts depend on the estimates of private companies and alternative indicators. FactSet expects that the American economy added about 50,000 jobs in September, compared to only 22,000 jobs in August, while the unemployment rate stabilized at 4.3%. Estimates also indicate that the private sector has added about 62 thousand jobs, while the government sector lost approximately 12 thousand jobs, especially in federal institutions affected by the closure. As for the average wages and weekly working hours, it is expected that it will remain unchanged. But behind these numbers, a more complex image lies. With the economic slowdown, the economy needs to add fewer jobs to maintain the stability of the unemployment rate, as a result of factors such as collective retirement and high frustration rates for job seekers. The August job report report shows a sharp decrease in vacancies in the construction sector by about 115 thousand jobs, which is the second largest registered decline, affected by high benefits and housing crisis. Nevertheless, the health sector continues to lead job growth with the support of demographic changes and increase the demand for care, but with weak employment ads and the high number of job seekers for long periods, difficulties for the unemployed increase in the labor market. Previous official data indicates that more than 25% of the unemployed have been looking for work for more than 27 weeks, which is the highest level since 2016 except for the period of the pandemic. While some indicators see that unemployment is still under control, the temporary absence of official reports remains a stumbling block in front of the real evaluation of the situation. Until the return of federal data, the American labor market image will remain foggy, pending the surprises that the coming weeks will carry.