Robust job market likely defied shutdown

WASHINGTON -- U.S. employers likely kept adding jobs at a healthy pace in January even in the face of threats ranging from weakening global growth to the Trump administration's trade war with China to the partial shutdown of the government.

Today, the Labor Department will issue the monthly employment report, the first major economic report to cover most of the 35-day shutdown period.

Economists have forecast employers added 165,000 jobs and the unemployment rate remained at a low 3.9 percent, according to data provider FactSet. The predicted job gain would be a solid one, though it would follow a blowout figure of 312,000 jobs added in December.

The partial government shutdown, the longest on record, isn't expected to have had a significant effect on the January jobs report. That's because of how the government will categorize the 800,000 federal workers who weren't paid for five weeks. All will be counted as employed in the government's count of jobs in January. That means the economy will almost certainly record the 100th straight month of job gains, a record.

Still, some of the roughly 380,000 federal workers who didn't work and weren't paid might be counted as unemployed in a separate survey the government uses to calculate the unemployment rate. If so, this could inflate the jobless rate by 0.2 percentage point, economists say, though the effect would be reversed in February as federal employees return to work.

Unlike some government agencies, the Labor Department received its annual funding before the shutdown and has operated normally throughout.

"The shutdown was very traumatic for federal workers, but it will probably not show up in most of the data for private sector workers," said Andrew Chamberlain, chief economist for the employment site Glassdoor.

One unknown factor is the impact of the shutdown on government contractors, who perform a wide range of jobs -- from janitorial work to data management. Some of them who were furloughed may receive back pay. But some won't, and they could contribute to a higher unemployment rate and lower job count.

Still, a solid jobs report would provide reassurance that the economy remains mostly healthy and likely to shake off any effects of the shutdown.

One positive sign emerged Wednesday from the payroll processing company ADP. Its survey found private businesses added more than 200,000 jobs in January. The ADP data doesn't cover government workers and doesn't always mirror the government's official monthly jobs report. But it suggests the shutdown had little effect on private-sector hiring last month.

In another encouraging sign, the number of people seeking first-time unemployment benefits reached a 49-year low two weeks ago, though the figure jumped higher last week.

"The fact that the labor market is hanging so tough is a reason for optimism," said Mark Zandi, chief economist at Moody's Analytics, which helps compile the ADP data. "As long as we are producing jobs at this pace, the economy will do OK."