Policymakers, investors, and businesses hoping for clarity on the status of the US labor market will not get it this week as scheduled. The Bureau of Labor Statistics (BLS), the agency tasked with producing the monthly jobs report, has been forced to suspend operations amid the ongoing government shutdown.
The shutdown began at 12:01 a.m. EDT on Wednesday after lawmakers failed to agree on a funding package, Cryptopolitan reported. No resolution means no BLS data, which leaves the US federal reserve in confusion two weeks after it cut borrowing rates as a “precautionary” measure.
The jobs report, scheduled for release Friday, was meant to be the last employment snapshot before the Federal Reserve’s next policy meeting in 26 days. Without it, officials will have to make interest rate decisions without the full picture of labor market conditions.
BLS hands tied during federal government shutdown
The Bureau of Labor Statistics, like dozens of other federal agencies, cannot operate without government funding. Its staff have been sent home until a deal is reached, so the agency is arguably unable to track the jobs of more than 170 million Americans and release its monthly economic reports.
BLS conducts two main surveys to calculate monthly changes, with the first one based on households, measuring employment, unemployment, and participation rates among different demographic groups. The second, known as the “establishment survey,” looks at job gains and losses in several industries, wages and working hours.
Both surveys are conducted in the middle of each month, but responses arrive days or even weeks later. Analysts then adjust the data before publishing the report on the first Friday of the following month. Sometimes, according to former BLS employees, the work continues until late on Thursday afternoon, just hours before release.
Assuming the September report followed the same timeline, the BLS was still in the middle of assembling data when the shutdown began early Wednesday.
Still, Democratic Senator Elizabeth Warren has pressed the administration to move ahead with publishing the September jobs numbers despite the shutdown.
A Senate Banking Committee aide told CNN that former BLS staffers informed Warren’s office that the data had already been collected and could be released.
“The jobs data scheduled to come out this Friday has undoubtedly been collected, and the President must release it,” Warren said in a statement. “Without it, the Federal Reserve will not have the full picture it needs to make decisions this month about interest rates that will impact every family across the country.”
No word from the White House has indicated it would consider releasing the numbers, contrary to expectations that it would not be released today.
Economists expected weak but improving figures
Economists had anticipated a modest rebound in hiring of between 50,000 and 80,000 jobs in September. That would be an improvement from the average of 29,000 jobs added each month this year, but still falls short of the roughly 100,000 jobs required to keep the unemployment rate steady.
According to payroll data released by ADP Research, private-sector employment fell by 32,000 in September following a revised 3,000 drop in August.
Fed rate cut decision without data impossible
The Federal Reserve will be meeting again on October 28 to decide whether it should make another interest rate cut, as inflation jumped up 0.2% in August. According to some economists, the absence of official labor market data could negatively affect the decision-making process.
“While federal government shutdowns, by their nature, are counterproductive, this one would be especially ill-timed given the current high degree of uncertainty surrounding the economy,” Mark Hamrick, senior economic analyst at Bankrate, wrote in an analysis on Tuesday.
The shutdown could also delay the upcoming release of the Consumer Price Index (CPI) report slated for October 15, just two weeks after the shutdown began. Even if lawmakers reach a funding deal before then, it is unclear if the agency will be able to gather and process the necessary data in time.
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Source: https://www.cryptopolitan.com/there-will-be-no-us-jobs-report-today/
