Government Shutdown and Computer Glitch Muddied the Waters in Determining Unemployment Rates and Manufacturing Gains

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Economists had expected the unemployment rate to drop to 335,000 last week, but instead the number of unemployed workers dropped to just 358,000, a reduction of 15,000. However, the statistics werent’ very clear, since the analysts had to adjust the figure for government workers applying for unemployment due to the government shutdown. Furthermore, a computer glitch in the state of California made numbers there hard to rely on, according to Lindsey Piegza, chief economist with Sterne Agee & Leach in Chicago. 

The computer glitch has left the Food Stamp Office and Xerox at odds with each other, as both blame the other for the system failure that led to the government’s inability to determine an individual’s food stamp limit for about two days in 17 states. The situation led to food stamp recipients clearing the shelves of some stores, including a few Wal-Mart stores in Louisiana. The incident has prompted government threats that those states won’t allow any food stamp recipients to draw their money in November.

Meanwhile, it appears the manufacturing sector in the Mid-Atlantic region showed positive gains this week, but the actual numbers are muddied for the same reasons: the government shutdown and the California computer glitch. However, the manufacturing expansion was slower for the month of October than for September of this year. This is according to the Philadelphia Federal Reserve Bank business activity index, which has shown positive signs of growth for the past six months.

According to the most recent accounts, the state of California was forwarned about the computer problem before it happened, yet did nothing to stop the upgrade which caused the virtual collapse of the food stamp system in 17 states. Even after wide scale problems became obvious, the operators of the system downplayed the problems and took no steps to right the situation.

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