Smith: The U.S. jobs report for January showed a gain of 304,000 new jobs, in spite of the recent partial government shutdown that furloughed 800,000 workers. Agricultural Prospects President Dr. Bob Young says it’s important to remember that the jobs report consists of two parts.
Young: It’s made up by an establishment survey, where they go out and actually survey the companies or the firms that hire folks, and then they actually go out and survey households, survey folks that work. So, the establishment survey, as far as they were concerned, folks just didn’t happen to be being paid, but as far as they were concerned, folks were still on the books, so there was basically no change in the establishment survey.
Smith: The household survey gives a better picture of the shutdown’s impact on federal workers. Young says combining the numbers of federal employees categorized as “unemployed on temporary layoff” or “employed but absent from work” shows that roughly 242,000 federal employees were out of work during surveys for the January jobs report. In spite of the shutdown, Young says the U.S. economy is still in reasonably good shape. And, he says agriculture should keep an eye on the jobs report because it’s a good indicator of how well the economy is doing
Young: Still, over the last six months or so, we’ve been running about 240,000 new jobs a month. So, from the job side of the ledger, you’d have to think the economy is doing pretty much okay at this stage of the game.
Smith: He says anytime the economy declines, it affects the overall demand for agricultural products.
Young: Anytime we end up with a downturn in the economy or a significant downturn in the economy, it does end up affecting folks demand, how they eat, where they eat. You know when you’ve got a weak economy, you’re not willing to go out and buy that steak, so if you’re cattle guys, it can have an effect on you. At this stage of the game, I think your story would have to be again the general economy is not doing all that bad. The jobs report is pretty positive at this stage of the game.
Smith: Chad Smith, Washington.