Turns Out the Shutdown Didn't Kill the Economy
"Job growth in January shattered expectations, with nonfarm payrolls surging by 304,000."
Thanks to the 35-day partial government shutdown, many economists were warning that the January jobs report would be, as The New York Times put it, “a mess.” Bloomberg’s prediction survey expected just 165,000 jobs created.
Well, so much for predictions.
“Job growth in January shattered expectations, with nonfarm payrolls surging by 304,000, the Labor Department reported Friday,” reports CNBC. Now, it wasn’t all great news. CNBC also notes, “December’s big initially reported gain of 312,000 was knocked all the way down to 222,000, while November’s rose from 176,000 to 196,000.” The headline unemployment rate ticked higher to 4%, and the fuller measure of unemployment rose to 8.1% from 7.6%, the result of layoffs due to the shutdown and also more people entering the workforce to find jobs. But one interesting note: Employment by the federal government actually rose by 1,000.
Well, so much for the shutdown.
A couple of observations: First, despite the massive entanglement of the federal government in the economy, even five weeks of a partial shutdown didn’t do much to drag down job growth, even if there was somewhat of a negative economic impact. President Donald Trump’s administration has done important deregulatory work that stimulates growth by getting government out of the way. Second, as we wrote yesterday, it’s now tax-filing season. That will help millions of individuals, but it will also help small-business owners who file taxes as individuals. Those small businesses are the real drivers of job creation and wage increases (3.2% over the last year), and they will see some breathing room from lower taxes. So we’ll go out on a limb and suggest the experts might just be wrong in predicting weaker economic growth in 2019.