What If They Shutdown The US Federal Government … And No One Noticed

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

Even amid a partial federal government shutdown, filings for U.S. unemployment benefits unexpectedly fell last week. Jobless claims declined by 3,000 to 213,000 in the week ended Jan. 12, a five-week low, according to a Labor Department report Thursday. Details on claims by federal employees are reported with a lag, and analysts caution that it may take more time for the closures to be fully reflected in the report.

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Let’s see what happens to US wage and earnings in the next report. Since Federal workers are paid higher salaries, on average, than private sector workers, we should see a big decline in hourly earnings (government contractors are counted as private workers).

True, nonessential Federal workers clearly are hurting (although most will be paid back salaries once the shutdown ends).

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