Khaberni - Estimates from the Federal Reserve Bank of Chicago suggest that the unemployment rate in the United States likely rose in October to its highest level in 4 years, with a slowdown in the employment rate of job seekers and an increase in layoff rates.
The bank estimated that the unemployment rate rose to 4.36% last month from 4.35% in September.
The bank has been providing bi-monthly unemployment rate estimates since shortly before the ongoing federal government shutdown, which has led to a halt in the flow of economic reports from the Bureau of Labor Statistics, the Bureau of Economic Analysis, and the Census Bureau.
Private sector jobs
A report on employment by "ADP" released last Wednesday mentioned that the number of employees at private sector companies in the United States had sharply increased again in October, but this shift is unlikely to signal a substantive change in the job market as sectors such as business services continued to reduce jobs for the third consecutive month.
The report showed that the number of employed in the private sector rose by 42,000 jobs last month after a report in September showed an increase of 29,000.
Nela Richardson, chief economist at "ADP," said: "Private sector employers have added jobs for the first time since July, but the hiring was modest compared to what we reported earlier this year."
Education, health care, commerce, transportation, and public utilities sectors led a slight increase in private sector jobs. For the third month in a row, employers reduced jobs in the professional business services and information sectors, as well as the leisure and hospitality sectors.
The "ADP" report, prepared in collaboration with Stanford's Digital Economy Lab, has often had monthly estimates that differ from the government's job count issued by the Bureau of Labor Statistics of the U.S. Department of Labor.
Even with delays in the employment report issued by the Bureau of Labor Statistics due to the longest government shutdown ever, economists continue to urge caution when evaluating the "ADP" report, pointing out differences in methodology among other limitations.
Matthew Martin, chief U.S. economist at Oxford Economics, said: "ADP data is only representative of private sector companies that rely on the institution to manage their payroll needs, which makes ADP data less representative on a national level. Employment data issued by ADP should be considered supplementary, not a substitute, for the Bureau of Labor Statistics survey."
The shutdown, which is now in its second month, has delayed the employment report for September, which had been scheduled for release on the third of October.
The employment report for October was scheduled to be released on Friday.
