A government shutdown would stifle flow of economic data
A government shutdown would stifle flow of economic data
The data in the weekly jobless claims report, like a lot of other economic information we pay attention to at Marketplace, is collected and reported by the federal government.
But with a government shutdown looming, we’re looking at a possible data collection gap.
During past shutdowns, agencies like the Bureau of Labor Statistics and the Census Bureau have sent most of their employees home. And their work on the monthly jobs report, key inflation metrics like the consumer price index and other important indicators has come to a halt.
The threat of a shutdown is coming just when the Federal Reserve really needs a clear picture of how the economy is doing.
During the 16-day shutdown in 2013, then-Bureau of Labor Statistics Commissioner Erica Groshen was one of three people coming in to work at the agency.
One day, she got a call from the Federal Reserve.
“They wondered whether they could fund the BLS to produce various data that they needed for their monetary policy-making decisions,” she said.
The Labor Department’s lawyers said no, that would violate the will of Congress. But the request shows how valuable government data is to the Fed’s work.
“This data is really infrastructure for our economy,” Groshen said.
Andrew Levin, a professor of economics at Dartmouth College, said the good news is that a lot of economic data is collected elsewhere. The Fed already looks at data gathered by the private sector, trade groups and nonprofits, and it can lean extra-hard on those sources during a shutdown, he said.
But it can’t replace government data completely.
“Government data, some of it is just too key and reliable to substitute private market data,” said Keith Hall at the Mercatus Center, an economic research center at George Mason University.
And in many cases, data about inflation or labor market conditions can’t be recaptured after the fact.
Economic data collection is considered nonessential during funding impasses. Still, Hall said, “We’re pushing that notion of, is it urgent at the moment?”
Because without that information, the Fed isn’t exactly flying blind, he added.
But it’s not going to be comfortable making interest rate decisions.
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