Shutdown Chaos May Weigh On January Jobs Report

January 29, 2019

On Friday, we’ll get the latest update on jobs and pay from the Bureau of Labor Statistics. Typically, we make predictions of what we’re likely to see when BLS unveils the first jobs report of 2019. But this month, it’s difficult to decipher what’s ahead. The surveys behind the January jobs report will be heavily impacted by the federal government shutdown that lasted most of January — making them a poor gauge of the nation’s job market in January.

Mixed Signals in January Report

The big shadow looming over the January jobs report is the federal government shutdown, which was the longest in U.S. history. As of today, around 800,000 federal government workers are impacted. Of them, about 380,000 were furloughed and were not working, while the rest worked in various federal agencies without pay.

How the jobs report counts these 800,000 workers in its surveys — as employed or unemployed — and how it tallies up pay and hours worked, will have a huge impact on the report, making the January BLS figures a potentially misleading gauge of the true health of the job market.   

According to the BLS, furloughed federal workers who aren’t working will be counted as employed in the so-called “employer survey” that counts jobs gains, as long as they’re promised back pay once the shutdown is over (a measure the president signed in mid-January). However, those same furloughed workers who aren’t working will be counted as unemployed in the “household survey” that calculates the nation’s unemployment rate.

Taken together, there is a lot of administrative uncertainty in the January jobs report — uncertainty about the numbers that’s not due to anything in the economy, but rather to ongoing dysfunction in the federal government. The January jobs report will offer a murky and unreliable read on the economy for now, possibly showing artificially rising unemployment but also steady payroll gains as furloughed workers are still counted on employer payrolls.

According to some estimates, the nation’s unemployment rate could rise by as much as 0.2-0.3 percent in January due to quirks in how furloughed federal employees are counted. For job gains, it’s difficult to make meaningful predictions for January, due to policy uncertainty surrounding the shutdown and how the BLS will record workers in a variety of shutdown-related circumstances.

In the absence of shutdown-related impacts, our simple ARIMA forecasting model predicts around 230,000 new jobs added to payrolls in January — a sign of a strong underlying job market in January. However, all bets are off on trying to predict BLS surveys until the shutdown is resolved — a situation that’s making it difficult for stock analysts and Fed policy makers to get an accurate read on the economy in January.

Shutdown Impacting Federal Hiring

Another area the shutdown is impacting is federal hiring. A new analysis from Glassdoor shows a surge in federal employees looking for new jobs on Glassdoor as the shutdown has lingered — up 10 percent from a year ago, with a clear spike since the day many federal workers missed their first paycheck.

The analysis also shows interest in federal government roles among job seekers on Glassdoor has fallen by a whopping 46 percent in the wake of the shutdown. That’s an ominous sign that the ongoing shutdown may have lasting impacts on talent in the federal workforce for years to come.

Hiring, Pay Strong on Glassdoor

Although BLS surveys are impacted by the federal shutdown, data from Glassdoor are not — offering some independent clues on the state of the nation’s job market in January.  

There were 6.51 million unique open jobs in the U.S. on Glassdoor as of January 21st. That’s up a robust 12.9 percent from the same period a year ago. Overall, we’ve seen no dip in private sector hiring in the wake of the federal shutdown, and job postings are up across a wide variety of industries.

Health care leads the nation for hiring on Glassdoor today with 1.05 million open job postings. They are followed by retail (780,700 open jobs), professional and business services (741,900 open jobs), food services and restaurants (526,000 open jobs), information technology (458,000 open jobs), and transportation and logistics (452,900 open jobs).

In terms of wages, Glassdoor’s Local Pay Reports paint a similar picture of a strong and steady job market in January. Despite shutdown-related uncertainty, median pay for full-time workers rose 2.3 percent year-over-year in January to $52,964 per year, with strong pay gains in variety of metro areas (see table below).  

Pay Growth Remained Strong on Glassdoor in January

Area Median Base Pay (January 2019) YoY %
U.S. National $52,964 2.3%
San Francisco $71,980 3.6%
Philadelphia $56,645 3.1%
New York City $63,655 3.0%
Los Angeles $62,172 2.9%
Seattle $62,808 2.7%
Boston $61,011 2.7%
Washington, D.C. $61,381 2.6%
Atlanta $55,148 2.6%
Chicago $57,436 2.4%
Houston $56,025 1.2%

Source: Glassdoor “Local Pay Reports” (

Watching for Shutdown Impacts

The federal shutdown has temporarily ended, for now. But should the nation find itself nearing the cliff of another shutdown, there will likely be larger impacts on jobs and the economy. According to estimates from the White House Council of Economic Advisers, every week a shutdown continues cuts quarterly GDP growth by about 0.13 percentage points.

The president temporarily ended the shutdown as it concluded its 5th week, cutting the economy’s growth rate by around 0.65 percent. For comparison, the economy grew at a 2.2 percent pace during the first quarter of 2018 — making a 0.65 percent cut a huge dent on the overall economy. That’s a trend we’ll be watching closely for any impacts on hiring and pay on Glassdoor in coming months.

To speak with Dr. Andrew Chamberlain about this month’s jobs report or labor market trends, contact pr [at] glassdoor [dot] com. For the latest economics and labor market updates, subscribe to email alerts here and follow @adchamberlain.