The Fed Might Not Get Key Data for the December Meeting—Even if the Shutdown Ends This Week

The Bureau of Labor Statistics will soon reveal whether hiring was robust in September and October. (Joe Raedle / Getty Images)

Key Points

• U.S. statistical agencies are expected to publish delayed September labor and inflation data quickly after the government reopens.
• Key economic reports for October and November, including jobs and retail sales, may not be available before the Federal Reserve’s December 9-10 meeting.
• The current government shutdown, longer than in 2013, has significantly impacted multiple months of economic data releases, causing uncertainty for policymakers.

U.S. statistical agencies could begin publishing delayed economic data within days of the government’s reopening, which is expected later this week.

Labor and inflation data for September will be published quickly, but key reports for October and November may not be available before the Federal Reserve’s Dec. 9-10 policy-committee meeting.

While private companies have helped fill the information gap during the longest-ever government closure, which began Oct. 1, their economic data are more fragmented, and in some cases less reliable than the official benchmarks provided by federal agencies such as the Bureau of Labor Statistics, the Bureau of Economic Analysis, and the Census Bureau. Fed officials, including Fed Chair Jerome Powell, economists, and investors have repeatedly lamented in recent months the dearth of official economic data used to make policy decisions.

The September jobs report, which includes the monthly change in nonfarm payrolls, the unemployment rate, wages, and hours worked, is the first post-shutdown release the public will see. It will likely be published within three days of the government’s reopening.

“The employment report for September was largely ready [before the government shutdown] so it could be released within a couple of days of the reopening,” says Gregory Daco, chief economist at EY-Parthenon.

Other September data, including retail sales, trade data, and the personal consumption expenditures price index, also will be released fairly quickly, as will official data on initial and continuing jobless claims. “Claims should be the easiest to start up as the states have continued to submit weekly during the shutdown,” says Maurine Haver, founder and CEO of Haver Analytics. “Only the Virgin Islands hasn’t produced figures.”

October’s economic data will be more difficult to produce because the shutdown impeded agencies’ abilities to field, collect, and process survey responses and price checks during the month. That could lead to longer publication delays and a higher margin of error when the data ultimately are released.

The BLS is also apt to miss the typical reference period—the week of the 12th of the month—for November’s economic releases. While surveyors’ ability to collect real-time data has been “lost forever,” says Daco, the agency could access company data, which would provide a partial and less granular view. If the shutdown ends this week, the BLS will still have time to collect November data, even on a delayed basis.

Haver expects the government to rely more than usual on estimates in calculating the consumer price index for October and November. “The agencies know data users don’t like missing values, so I expect they will do their best to provide complete figures,” she says.

She doesn’t expect the statistical agencies to combine monthly readings in the coming releases.

Michael Gapen, chief economist at Morgan Stanley, estimates that the October and November jobs reports will be released on Dec. 8, based on the timeline of data releases following the 2013 government shutdown. But he doesn’t expect October’s retail sales and inflation data to be published until around Dec. 18.

“If the shutdown ends this week, we also think it is possible that November payrolls could be released on time or close to it, which could be before the [Fed’s December] meeting,” he wrote in a brief published on Monday.

But the 2013 shutdown was less than half as long as this year’s closure, and it didn’t significantly affect multiple months of economic data releases, he noted.

The uncertainty caused by the lack of official government data could linger for a while after the government reopens. “That is one of many reasons the Fed is a little nervous in moving” to change monetary policy, says Diane Swonk, chief economist at KPMG. “In a fog, you slow down, as Powell noted.”

Write to Megan Leonhardt at megan.leonhardt@barrons.com