Government Shutdown Doesn't Affect Improving Economy

Despite initial predictions of even the most optimistic Wall Street speculator, 200,000 jobs were added in the private sector during October, according to the latest report from the Department of Labor, The New York Times reported.

Most economists were wary, given the recent government shutdown, and capped predictions between 50,000 and 150,000. The DOL also revised figures from August and September to create room for 60,000 previously undocumented hires, according to The Times.

By the numbers, unemployment actually increased from 7.2 percent to 7.3 percent, though the data counted government employees on furlough as unemployed.

The DOL's report wouldn't have been as newsworthy had there not been a shutdown, according to Guy Berger of RBS, who noted the additional 204,000 nonfarm jobs in October compared favorably to the 194,000 monthly average that's held for the last 12 months. If that rate stays for another 12 months unemployment would fall to 6.5 percent by December 2014, The Times reported.

"Sometimes it's a little faster, sometimes it's a little slower," Berger said. "The labor market is in decent shape, but it's not doing that much better than six months or a year ago."

With the state of the economy firmer than anticipated, the Federal Reserve will most likely speed up its plans to decrease national spending intended to boost the economy, according to The Times.

"The Fed now has one more payroll report before its December meeting," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "Clearly, another report like this one will greatly increase the odds of tapering at that meeting. Our base case remains that it won't happen then, but the odds have substantially improved with the release of these numbers."

A puzzling outcome from the report was the decrease in the size of the labor force, which fell by 720,000. It's at a 35-year low of 62.8 percent.

"We're scratching our heads," Berger said. "You have to set this aside and look at the November report. Does it reverse? Does it keep declining? To us, it's puzzling."