Shutdown likely to distort October jobs report

• Economists expect about 122%2C000 jobs were added in October
• Figures%2C particularly the unemployment rate%2C will reflect shutdown%27s impact
• Look to December for first %27clean%27 count

The economy may be picking up based on data released Thursday, but don't expect Friday's October jobs report to confirm it.

Last month's government shutdown is likely to distort today's report, many economists predict, depressing job gains and potentially raising the unemployment rate.

The median estimate of economists surveyed by Action Economics is that a modest 122,000 jobs were added last month, and the unemployment rate rose to 7.3%. In September, the economy gained 148,000 jobs, and the jobless rate was 7.2%.

The vast majority of the 450,000 federal workers furloughed Oct 1-16 were counted as employed because they received back pay.

But employment is expected to be reduced by private-sector workers temporarily laid off because of the shutdown, including federal contract workers.

The shutdown could have a far bigger impact on the unemployment rate, which is calculated from a separate survey of households. Furloughed federal workers and affected private-sector employees who didn't go to work in the week that includes Oct. 12 will be considered not employed by that survey.

The weak job numbers likely will be reversed in November because workers affected by the shutdown will be back on the payrolls. As a result, the next "clean" jobs report is expected to be the December tally, to be released in early January.

Job growth has slowed from its average monthly pace of about 200,000 early in 2013 to 143,000 in the third quarter as the impact of federal spending cuts and tax increases grew. Barclays Capital economist Michael Gapen says those effects have persisted into the fourth quarter but should ease next year as the private sector strengthens.

The Commerce Department said Thursday that the economy grew at a better-than-expected 2.8% annual rate in the third quarter on heavy stockpiling of inventory by businesses and strong state and local government spending.

The Labor Department said Thursday that initial applications for jobless benefits last week fell by 9,000 to 336,000, a sign that the labor market may be improving after a backlog of California claims and the shutdown skewed totals the past two months.