Due to the ongoing federal government shutdown, the U.S. Department of Labor announced on Friday, November 7th that it will be unable to release the October employment report as scheduled. This marks the second consecutive month that the federal government has not published the employment report.
As the government shutdown enters its second month, policymakers, investors, economists, and the general American public are finding it challenging to grasp the economic situation due to the interruption in government data. While some private entities have stepped in to provide alternative data sources, economists caution that these sources have limited scope and cannot substitute for the comprehensive statistical data released by the government.
Although the September employment report, originally set to be released on October 3rd, may potentially be published a few days after the government reopens, economists are concerned that the Department of Labor may not be able to release a complete October report as no data was collected during that month.
The Bureau of Labor Statistics (BLS), the statistical agency of the U.S. Department of Labor, is responsible for conducting surveys of both businesses and households in the week that includes the 12th of each month to compile the employment report.
The employment report consists of two surveys: the establishment survey used to calculate nonfarm employment, and the household survey used to calculate the unemployment rate.
For the establishment survey, businesses typically need to fill out a form and return it to the BLS. Data for the household survey is collected by field workers, often from the Census Bureau, who gather information from randomly selected households.
Ron Hetrick, Senior Labor Economist at labor market analysis firm Lightcast, stated that “data from the household survey will not be published.”
If the government reopens next week, data necessary for the November employment report could be collected.
Having served as a chief at the Bureau of Labor Statistics for many years overseeing employment reports, Hetrick highlighted the complexity of obtaining information from participants in the household survey about their employment status during the month of October.
He mentioned, “The wage data is actually slightly different, with companies potentially still tracking their wage distributions… They might be able to complete the wage survey portion, but the household survey portion cannot be completed.”
Other economists expressed similar views, and there is also the risk of not being able to publish the Consumer Price Index report, which requires on-site data collection.
Last month, the White House warned that due to the government shutdown, the Consumer Price Index report for October might not be published, potentially marking the first time in U.S. history.
Former BLS Commissioner Erica Groshen commented, “Any household survey conducted on a monthly basis could have data gaps, and the current unemployment rate data from Census Bureau surveys may also be unavailable.”
Goldman Sachs economist Ronnie Walker proposed three options for the BLS last month: 1. Conduct interviews and inquire about the original reference week from October; 2. Conduct interviews but adjust the reference week to normalize the timing between the reference week and the interviews; 3. Skip data collection for October.
In a report, Walker stated, “After the shutdowns in 1995-1996 and 2013, the BLS chose the first option because they believed the potential seasonality distortion caused by moving the reference week outweighed the potential recall bias issues of a longer interval between the reference week and interviews.”
He emphasized, “The longer the shutdown, the greater the risk that BLS will abandon collecting data for October.”
(Reference: Reuters)