Economists Fear Data 'Black Hole' in Wake of US Government Shutdown

Economists Fear Data 'Black Hole' in Wake of US Government Shutdown

Economists' worries that critical US inflation and unemployment information for October might vanish into a data 'black hole' appear to be justified. White House officials have indicated that some key economic data may be permanently lost.

Hassett, one of President Trump's top economic advisors, stated in an interview that the October unemployment rate will not be released due to the longest government shutdown in history, marking the first time in 77 years that this data has not been published. However, Hassett affirmed that estimates for job creation in October would still be calculated – a direct contradiction to White House Press Secretary Levitt's claim a day earlier that the jobs report might not be released at all.

It remains unclear whether the October Consumer Price Index (CPI) will be released. Levitt had suggested that the CPI report might not be published, but Hassett offered no comment on the matter.

The Bureau of Labor Statistics (BLS), responsible for compiling the CPI and jobs reports, is expected to release an updated economic data calendar within days. The agency stated in a notice on its website: "We appreciate your patience, and we are working to release this information as quickly as possible, as a full assessment of the situation and finalization of revised release dates may take some time."

The end of the government shutdown appears to be just the beginning of the chaos for the key statistical agencies responsible for collecting vital information about the US economy.

These problems could take months to resolve, potentially obscuring the true picture of the US economy at a crucial moment when growth is faltering and inflation is creeping up. The Federal Reserve is also trying to decide whether to continue cutting interest rates, and data delays are complicating its work.

Irrecoverable Gaps?

While the October CPI and jobs reports may not be as accurate as usual, they could still provide enough information for Wall Street investors to get a general sense of the economic situation during the shutdown.

"Something is better than nothing," says Heather Long, chief economist at Navy Federal Credit Union. "Nobody wants a true data 'black hole' in October."

The core issue is that government workers who were forced to furlough were unable to conduct employment surveys with businesses and households in October, nor could they go to stores to check price changes. Now, they have to ask about these things weeks after the fact.

The BLS and other statistical agencies can try to backfill data and make some educated guesses, but that is not a guaranteed solution.

The easiest information to collect will come from businesses that electronically send employment, price, retail sales, and other data to the government. The biggest difficulty will involve survey data derived from individuals, such as the unemployment rate.

The BLS directly asks up to 60,000 households each month about their employment status. However, it is much more difficult for people to accurately recall what happened two months ago rather than just a few weeks.

The government shutdown is not the only obstacle facing the BLS. First, the agency does not have a permanent director. The former director was fired in the summer by Trump, and the White House's first nominee to succeed him was also withdrawn.

According to estimates from a support group founded by two former directors called "Friends of the BLS," the BLS has lost 25% of its staff since February, and one-third of leadership positions remain vacant.

The group said that other employees may have left their jobs during the shutdown because they were not paid, and a hiring freeze has made it impossible to fill these positions. "The recovery process may be slower due to fewer staff available to work, work overtime, or reassign," the Friends of the BLS said in a blog post.

So how slow specifically? Economists say that data may be affected for months. Returning to normal may not happen until early 2026.

"Retrospective" Data

September economic reports were not greatly affected by the government shutdown because these reports were largely completed before the shutdown began on October 1. For example, the September jobs report and producer price index are expected to be released next week. However, these reports are already outdated.

Nancy Vanden Houten, chief US economist at Oxford Economics, says that "The data that will be released shortly after the end of the shutdown will be retrospective, and it will not show how the economy performed during or immediately after the shutdown."

More importantly, the November economic reports may also be delayed because statistical agencies must first complete work on the September and October reports. Economists say that in some cases, two months of data for the same report may be combined and released at the same time.