White House Press Secretary Carolyn Levitt said Wednesday that two key government reports on October inflation and the labor market "may never" be released.
Since October 1, the six-week government shutdown has essentially halted the release of government data that Wall Street and economic policymakers rely on to gauge the health of the economy. Although the shutdown is now expected to end soon, the White House has stated that last month's inflation and jobs reports may not be released due to the prolonged closure of federal agencies.
"Democrats may have permanently damaged the federal statistics system, and the October CPI and jobs reports may never be released," Levitt told reporters on Wednesday.
Levitt stated that the government shutdown made it extremely difficult for economists, investors, and Federal Reserve policymakers to obtain crucial government data. She blamed the shutdown on Democrats.
Currently, the U.S. Bureau of Labor Statistics has not indicated when it will begin processing the backlog of important economic reports, nor has it disclosed which reports may be affected by the shutdown.
It's worth noting that the White House stated at the end of last month that it was unlikely to release the October inflation data, adding that this would be the "first time in history" that the data would not be released. Wednesday marked the first time the White House questioned whether the October jobs report would even be released.
Before Levitt made those comments, many analysts had speculated that the Bureau of Labor Statistics would manage to release some of the October inflation data, even if the report was based on a smaller sample size than usual. "I still believe the Bureau of Labor Statistics will do everything it can to release the October CPI data… even with a significantly reduced sample size," wrote Omair Sharif, an analyst at Inflation Insights, in a report earlier this week.
Rare data missing
During the government's economic data blackout that began on October 1, the U.S. Bureau of Labor Statistics only released the September Consumer Price Index report, making it difficult to get a clear picture of the economic situation, although a range of unofficial indicators from private institutions attempted to fill the gap.
The monthly nonfarm payrolls report is one of the most market-sensitive indicators released by the government. The recent lack of official U.S. economic data has forced economists and investors to scramble for alternative clues, including a large number of private sector reports and forecasts. These reports suggest that the U.S. job market remains constrained by weak hiring, and layoffs may be intensifying—as evidenced by the tens of thousands of white-collar jobs cut by several well-known companies. The fact that thousands of government employees who accepted the Trump administration's extended resignation arrangements were not removed from the payroll until October is also expected to drag down the overall job market performance that month.
In August, the last month for which federal data is available, the U.S. unemployment rate was 4.3%, and employers added only 22,000 jobs, continuing the sharp slowdown in job growth that has begun this year.
With the government poised to reopen, the U.S. Bureau of Labor Statistics is expected to release the backlogged September jobs report quickly , as the data is primarily based on information collected before the October 1 government shutdown—releasing the data should not be too difficult. Morgan Stanley Economists, drawing on their experience following the 2013 government shutdown, estimate that if the U.S. government reopens this Friday, the September jobs report may not be released for at least three days—that is, on November 19.
However, the October data will undoubtedly face greater challenges , as the government shutdown prevented staff from collecting statistical data for the entire month. Some data (such as nonfarm payroll growth and wholesale price information) can still be "saved" because businesses provide some data directly to the Bureau of Labor Statistics. But with Bureau of Labor Statistics staff furloughed throughout October, other data will be much more difficult to determine.
For example, in terms of labor force data, retrospective surveys of people's employment status in the previous month may face challenges. Household surveys (crucial for calculating the unemployment rate) are primarily conducted by telephone. Many businesses keep records and report data electronically, but contacting workers by phone afterward to recall their employment status for a particular week in October is far more difficult. Some economists have previously noted that, due to limitations in the methods of collecting relevant basic data, the October CPI and unemployment rate are most likely not to be released.
Former Bureau of Labor Statistics Director John McConnell, who was fired by Trump this summer, pointed out on social media: "You can't walk into a Costco in mid-November and find the October price of a certain item." She stated that the October inflation report "simply cannot be completed."
White House National Economic Advisor Hassett also said on Tuesday, "I've heard that some surveys were never completed, so we may never know what happened that month. We may have to go through a fog of uncertainty for a while longer until data agencies are back to normal operations."
Industry insiders say that this prolonged government shutdown is undoubtedly an unprecedented blow to the U.S. Bureau of Labor Statistics, which was already facing budget constraints and was further burdened by increased political interference after President Trump fired McEnany this summer.
In the past, no government shutdown has ever lasted this long, enough to disrupt the work of the Bureau of Labor Statistics to a similar degree, or even if a shutdown were prolonged, it would leave the Bureau of Labor Statistics with funds to continue compiling statistics.
(Article source: CLS)
