On Friday, October 3, when the US Bureau of Labor Statistics (BLS) should have released the monthly employment report, it was delayed due to the federal government shutdown. Economists, investors, and policymakers had to turn to private institutions and unofficial data sources to find alternative solutions for the September employment report.
Private sector data, while not able to entirely replace government statistics, has helped fill this gap. Reports from payroll processing company ADP, job platform Indeed, and labor analytics company Revelio Labs have become important references for investors and economists.
With over 26 million workers’ payroll data, ADP’s report provides real-time insights into the job market trends, while Indeed tracks job vacancies. Revelio utilizes information from platforms like LinkedIn to estimate employment, wages, recruitment, and turnover.
Michael Feroli, Chief US Economist at JPMorgan Chase, mentioned that in the absence of official data, these sources can piece together a “mosaic-like picture of the labor market.”
Aditya Bhave, Senior Economist at Bank of America, noted that non-traditional data can “help us get through until official data is available.”
The longer the government shutdown continues, the greater the impact on decision-makers waiting for official employment data, especially Federal Reserve officials.
Ryan Sweet, Chief US Economist at Oxford Economics, stated that the current government shutdown is untimely as the Fed lowered interest rates in September, closely monitoring the labor market, with another meeting scheduled for late October.
For a long time, investors have relied on private data such as railroad freight volumes, cardboard demand, and scrap metal prices as market indicators. Recently, Vanguard Group used changes in participation in 401(k) retirement plans to judge employment conditions, while Bank of America used credit card usage by customers to infer consumer spending and labor market trends.
Revelio Labs’ approach involves leveraging social platform data to provide a different perspective. The company estimated on Thursday, October 2, that the US added around 60,000 new jobs in September, more optimistic than ADP’s report of a 32,000 job reduction in the private sector. Revelio believes these two reports are complementary and can be used in combination to estimate the BLS’s expected job additions report of 32,000.
Revelio only started releasing reports in September this year, and its sustainability remains to be observed.
Nela Richardson, Chief Economist at ADP, emphasized that private data is not a substitute but serves as a complementary role. She stated, “In the future, official and private data will form a diversified set of indicators to reflect the complexities of this economic landscape.”