After lackluster jobs report, White House warns of shutdown’s effects

WASHINGTON -- After a lackluster September employment report, a top White House official warned Tuesday that the partial government shutdown led the labor market to worsen this month and probably cost the economy “a decent number of jobs.”

Jason Furman, chairman of the White House Council of Economic Advisers, noted that September was the 43rd straight month of private sector job growth. In a report delayed by the shutdown, the Labor Department said the economy added 148,000 jobs overall last month, well below analyst expectations of 185,000.

The jobs outlook has worsened for October because of the 16-day shutdown, Furman said in a White House blog post. He pointed to a jump in initial jobless claims in the first week of the month and a recent drop in Gallup’s job creation index.

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Economists have said the 16-day shutdown and political fight over raising the debt limit probably reduced overall economic output in the fourth quarter of the year by about 0.5 percentage points -- a significant amount given already weak annualized growth of about 2%.

“Overall, there’s no question this brinkmanship is going to cost us a couple of tenths on our growth rate in the fourth quarter and decent number of jobs in October,” Furman told CNBC.

“This shutdown is going to have ramifications for months to come,” he said.

Obama administration officials want to make sure the shutdown-related economic hit is an aberration by avoiding another fiscal impasse when the short-term government funding runs out again on Jan. 7 and the debt limit increase expires on Feb. 15.

“We have it in our power to make sure this was just a one time thing we’re not repeating,” Furman told CNBC.

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