Article Summary
- Impact of the US government shutdown on the release of key economic data.
- Concerns regarding the accuracy and completeness of October's inflation and unemployment figures.
- Challenges faced by the Bureau of Labor Statistics (BLS) in collecting and processing data in a timely manner.
- Implications for monetary policy decisions by the Federal Reserve.
- Potential impact of delays on investor confidence and market stability.
US Faces Economic Data 'Black Hole' Due to Government Shutdown
Economists have voiced concerns that crucial U.S. data on inflation and unemployment for October could vanish into a data “black hole” due to the recent government shutdown. These fears appear warranted, with White House officials suggesting that some key economic data may not be released at all.
Hassett, one of President Trump's chief economic advisors, stated that the October unemployment rate will not be released, marking the first time in 77 years that the release has been skipped. However, he indicated that October's job creation estimates will still be calculated – a direct contradiction to White House press secretary Leavitt, who previously claimed that the jobs report might not be released at all.
The fate of October's Consumer Price Index (CPI) remains uncertain. While Leavitt hinted that the CPI report may not be released, Hassett did not comment.
The Bureau of Labor Statistics (BLS), responsible for compiling CPI and employment reports, is expected to release an updated economic data calendar in the coming days. “We appreciate your patience as we work to make this information available as soon as possible. Fully assessing the situation and finalizing revised release dates may take some time,” the agency acknowledged on its website.
Ripple Effects on the Economy
The end of the government shutdown, it turns out, is just the beginning of the disarray for the major statistical agencies responsible for collecting key economic information. These problems could take months to resolve, potentially obscuring the true picture of the U.S. economy at a critical juncture, as growth sputters and inflation quietly creeps higher. The Federal Reserve, also, seeking to decide whether to continue cutting interest rates, is finding its job complicated by the data delays.
Even if October's CPI and employment reports aren't as precise as usual, they can still provide Wall Street investors with enough information to get a general sense of how the economy performed during the shutdown.
“Some data is better than no data,” said Heather Long, chief economist at Navy Federal Credit Union. “Nobody really wants there to be a data ‘black hole’ for October.”
The core of the problem is that government workers forced into furlough were unable to conduct employment surveys of businesses and households in October, or to go to stores to check on price changes. Now, they must ask about these things weeks later.
The BLS and other statistical agencies can try to backfill data and make some educated guesses, but this is not a foolproof solution.
The easiest information to gather will come from businesses that electronically send employment, price, retail sales, etc., data to the government. The greatest difficulty will involve survey data drawn from individuals, such as the unemployment rate.
The BLS directly asks as many as 60,000 households each month about their employment status. However, it's much harder for people to accurately remember what was happening two months ago rather than weeks ago.
The government shutdown isn't the only obstacle facing the BLS. For one, the agency doesn't have a permanent commissioner. The former commissioner was ousted in the summer, and the White House's first nominee to succeed him was withdrawn.
According to an estimate by “Friends of the BLS,” a support group founded by two former commissioners, the BLS has lost 25% of its staff since February, and one-third of its leadership positions remain vacant.
Other employees may have quit during the shutdown because they were unable to get paid, and a hiring freeze has prevented those positions from being filled, the group said. “The recovery process may be slower because there are fewer employees available to work, work overtime or be reassigned,” “Friends of the BLS” said in a blog post.
Just how slow? Economists say data could be affected for months. Getting back to normal may not occur until early 2026.
'Backward-Looking' Data
September's economic reports were largely unaffected by the government shutdown, as those reports were mostly complete before the shutdown began on Oct. 1. For example, September's jobs report and producer price index are scheduled to be released next week. However, these reports are already dated.
“The data that will be released shortly after the shutdown ends will be backward-looking, it won't reveal how the economy performed during or immediately after the shutdown,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics.
More importantly, November's economic reports may also be delayed, as statistical agencies must first complete work on September and October reports. Economists say that in some cases, two months' worth of data for the same report may be combined into a single report and released simultaneously.
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