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Associated Press
Salanda Bowman discusses the health care field with college student Jason Ward at a recent job fair in Owensboro, Ky. Economic reports show that employers held back on hiring even before the government shutdown began.

Job market weakened even before government shutdown

Companies ‘not feeling confident’

– The uncertainty and weakness that hung over the U.S. job market in September before the government shutdown aren’t going away.

Employers likely will remain slow to hire as long as the economy struggles to accelerate, consumers limit their spending and Congress keeps putting off a resolution to a budget fight that will resurface early next year.

Just a few months ago, many economists predicted that hiring would pick up by year’s end as the effects of tax increases and government spending cuts that kicked in this year faded.

No longer. The September jobs report made clear that hiring isn’t strengthening. It’s slowing.

“We had assumed that the headwinds would dissipate, but in fact they didn’t,” says Doug Handler, an economist at IHS Global Insight.

The 16-day partial shutdown of the government, which began Oct. 1, will probably depress October hiring even further because government contractors and other companies affected by the shutdown imposed temporary layoffs.

And the budget battles that led to the shutdown are likely to flare up later this year and in early 2014. Last week, Congress agreed to keep the government running only until Jan. 15 while President Barack Obama and Congress seek a broader budget agreement.

In the meantime, uncertainty about another budget impasse – and potentially another government shutdown – may cause some businesses to hold off on hiring or expanding.

“Companies are not feeling confident enough to expand, to hire, to invest,” said Yelena Shulyatyeva, an economist at BNP Paribas.

“They’re just sitting on the sidelines, being cautious, and watching all these headlines from Washington.”

Consider Patrick Shrader, vice president of Arundel Manufacturing, based near Portland, Maine. Shrader said the uncertainty and brinkmanship in Washington have led his company to postpone hiring.

“As soon as we think the dust is settled, and we’re ready to move forward, there’s something else,” he said.

Arundel makes precision metal components for oil and gas drilling equipment, aircraft and semiconductor manufacturers. Defense contracts make up about one-fifth of business.

The company has enough work to support up to 10 hires, on top of its current staff of 80, Shrader said. But it isn’t ready.

“We’re not prepared to bring anybody else on board until we figure out what’s going on after Jan. 15,” he said.

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