Missing Economic Data? Take That With a ‘Grain of Salt.’

The Department of Labor headquarters in Washington, D.C. (Al Drago/Bloomberg)

Key Points

• Economists anticipate federal agencies will release key economic indicators despite the government shutdown, which is expected to end this week.
• The White House suggested October CPI and jobs reports might not be released.
• Data-collection challenges, particularly for the October household survey and CPI, could lead to less reliable or delayed economic reports.

Economists and analysts expect the Bureau of Labor Statistics and other agencies will be able to deliver critical indicators on employment, inflation, spending, and economic activity regardless of the record-breaking federal government shutdown.

The shutdown is on track to end this week, potentially as soon as Wednesday evening, which means that federal employees—including those employed by statistical agencies—should be return to their jobs no later than Monday. Once back at work, the BLS, the Bureau of Economic Analysis, the Census Bureau and others will be able to resume collecting, processing and distributing economic data—tasks that have been stalled since the onset of the shutdown on Oct. 1.

Economists expect missing September data to come out as early as next week. And they are fairly confident that the agencies will be able to publish October numbers, albeit on a more limited basis and with a greater lag.

That is in contrast to the Trump administration, which has raised doubts that agencies, particularly the BLS, can rise to the challenge of generating the October measures of employment and the consumer price index.

The shutdown “may have permanently damaged the Federal statistical system, with October CPI and jobs reports likely never being released,” White House press secretary Karoline Leavitt said Wednesday.

Last month, the administration floated the idea that the October CPI wouldn’t be published, but the BLS cast doubt on that. “Once funding is restored, BLS will resume normal operations and notify the public of any changes to the news release schedule on the BLS release calendar,” the agency said in a statement to Barron’s at the time.

The BLS, at which nearly all employees have been furloughed, hasn’t announced plans for post-shutdown releases of economic data.

Economists expect information about coming releases could come as soon as late Thursday or Friday. The vast majority of them expect the agency will produce October jobs and inflation reports, even if the data are more limited than normal.

“Frankly, I would take the White House’s statement with a large grain of salt,” said Omair Sharif, founder of the research firm Inflation Insights. “I don’t know where they are getting this information from. These kinds of decisions are made by BLS technocrats, not by the White House.”

When it comes to labor data, it is worth noting that the BLS is statutorily mandated to collect, collate, report, and publish “full and complete statistics of the volume of and changes in employment, as indicated by the number of persons employed, the total wages paid, and the total hours of employment” for each month.

Sharif noted that the BLS will need to have internal discussions about what missing data they can gather. No one, however, disputes that it will be challenging for the BLS to gather data typically included in the October household survey, which is used to calculate the unemployment rate, and CPI inflation.

The CPI data are collected, in part, by BLS field staff who use online prices, as well as thousands of in-person visits that were not conducted in October and early November.

Some prices can be recreated, says Morgan Stanley economist Sam Coffin, but like many economists, he is expecting the October estimates to be less reliable. During the 16-day government shutdown in 2013, the BLS only got 75% of the month’s usual data.

“With a four-week shutdown, the yield will be that much less—maybe 50% of the usual data,” Coffin estimates.

Additionally, some prices are collected for the CPI only every two months. That means the fact that data wasn’t collected for October could result in not only a lower-quality report for that month, but also shakier numbers for November and potentially December.

“We won’t know what the BLS will do until all their experts return and assess their options and capacity,” says Erica Groshen, a senior economics advisor at Cornell University and a former BLS commissioner.

Even if the BLS does cancel the October releases, it would likely still include October statistics in the November releases and have them available in the data series. There is a “difference between saying that a release is canceled, and that the data will never be available,” she adds.

Nancy Vanden Houten, lead U.S. economist for Oxford Economics, said that based on her experience, she believes the agencies could combine the releases of some October and November data. But she does expect to see complete data—eventually.

That doesn’t mean it will all arrive before the Dec. 9-10 Federal Reserve policy meeting. Members of the Federal Open Market Committee likely won’t have a complete set of October and November data to work with.

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