Government Reopening Restores Critical Economic Reporting Flow
The U.S. government is back in business, having emerged from its longest-ever shutdown. The 43-day closure had brought operations to a standstill and halted the delivery of data. This action enables agencies to once again publish federal statistics, which are crucial for keeping tabs on the economy.
The reopening was met with approval by economists, policymakers, and investors alike, who had found the absence of data a significant hurdle in their decision-making processes. Mark Zandi, from Moody’s Analytics, likened the lack of reports to navigating through fog without any instruments.
Backlog of Economic Reports Begins Clearing Next Week
The Bureau of Labor Statistics (BLS) has pushed back the release of the September jobs report, which was first scheduled for October 3. The new publication date is November 20. This report marks the beginning of a series of postponed publications.
Other important economic signals, including inflation rates, GDP figures, retail sales data, and consumer spending trends, will be released in the weeks ahead. This is contingent on statistics agencies finalizing their updated schedules. Officials cautioned that the initial figures could show discrepancies, a consequence of the data collecting being disrupted.
Shutdown Disrupted Data Collection and Quality Assurance
Experts warned that the data collected post-shutdown might be lacking. Many economic indicators rely on related data series, such as the Consumer Price Index (CPI), the Producer Price Index (PPI), and Personal Consumption Expenditures (PCE).
The 43-day moratorium put a stop to household surveys, field visits, and phone interviews. Erica Groshen, who once headed the Bureau of Labor Statistics, pointed out that the absence of October’s figures would create gaps and necessitate a substantial dependence on estimates.
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October Jobs Data May Be Permanently Lost
Some officials hinted that the labor figures from October may be permanently skewed. The surveys that provide employment statistics were interrupted before the data collection was finished.
Consequently, the next reports might include just incomplete payroll figures from businesses, leaving out the unemployment rate. Analysts are calling this a “lost month” for U.S. labor statistics.
Inflation Reporting Expected To Be Opaque And Incomplete
Economists cautioned that the October inflation figures may be especially suspect. The reason? A significant portion of the statistics relies on in-person visits to stores. Without these data, agencies could use statistical imputation to fill in the missing information.
If inflation data becomes less reliable, the Federal Reserve could struggle to get a clear picture of how prices are moving. The wholesale pricing data, a key component in calculating PCE estimates, was also absent from the report.
Agencies Face Staffing Shortages and Backlogs
The Census Bureau and the Bureau of Labor Statistics, among other federal agencies, are currently functioning with fewer personnel and fewer resources, a consequence of previous workforce reductions. A third of senior positions are still unfilled, which is making things harder as we try to get back on track.
Government officials said that a restoration to the usual reporting schedule might not happen until early 2026. Economists anticipate that it could take a few cycles before the dependability and timeliness of the data are completely ironed out.
Wall Street and the Fed Brace for Market Volatility
The markets had a measured reaction to the government’s reopening announcement. Analysts anticipate a bumpy ride ahead, as markets process the impact of postponed data and unanticipated adjustments.
“If the new data doesn’t match what we’re anticipating, we might witness some volatile market movements,” Zandi stated. Economists also noted that justifying monetary policy choices might be more difficult until the data stabilizes.
