Global stocks were mostly lower and Wall Street futures were flat Friday on investor uncertainty ahead of a key jobs report out of the United States.þþThe big question before the October employment numbers due out at 8:30 a.m. Eastern time: How much did the 16-day partial government shutdown affect hiring last month?þþ“The government shutdown has created a lot of noise and the numbers are going to be sloppy,” said Phil Orlando, chief equity strategist at Federated Investors.þþIn afternoon European trading, Britain’s FTSE 100 slipped 0.5 percent and Germany’s DAX fell 0.7 percent. On Wall Street, futures for the Standard & Poor’s 500-stock index were narrowly higher. Asia markets closed lower.þþThe American payroll data could provide the latest hint on when the Federal Reserve would start pulling back, or “tapering,” its stimulus. Speculation that the Fed could scale back the program was triggered by quarterly data on Thursday that showed the world’s biggest economy grew faster than expected.þþThe shutdown may have caused the unemployment rate to spike and hiring to slow. If so, economists expect those trends will be mostly reversed in November.þþEconomists forecast that employers added 122,000 jobs in October, according to a survey by FactSet. That’s sharply lower than the 148,000 added in September, and it would be well below the average job gain of about 180,000 in the first nine months of this year.þþThe unemployment rate was projected to rise to 7.3 percent from 7.2 percent, the first rise since May. Some economists feared the shutdown could cause unemployment to jump to 7.6 percent.þþA large impact by the shutdown could make it difficult for economists to spot any underlying trends, leading the Federal Reserve to look past both October and November’s reports because of the distortions. That’s a big reason many economists expect Fed policy makers won’t pull back on their stimulus efforts until next March.þþAbout 450,000 government workers were furloughed during the shutdown. Some employees at government contractors were also likely put on temporary layoff. And workers at restaurants, retail stores and other businesses located near national parks or federal buildings that were closed also likely cut back on staff.þþWorkers on temporary layoff would be classified as unemployed for purposes of the unemployment rate. That could cause the rate to jump.þþBut furloughed workers would still be counted as employed by the government’s survey that counts jobs. As a result, hiring may not look as bad as the unemployment rate.þþHiring was already weakening before the shutdown. Employers added an average of just 143,000 jobs from July through September. That’s down from an average of 182,000 from April through June and 207,000 in the first three months of the year.
Source: NY Times