Policymakers, investors, and business leaders are concerned about the pace of the US job market, and they’re looking to slow it down. However, that goal may be out of reach for now.
The Bureau of Labor Statistics (BLS), which tracks and reports employment data, is currently unable to function due to the government shutdown that started Wednesday without a specified end date.
Because of this shutdown, the BLS won’t be able to compile or release vital economic information, including the federal employment report that was supposed to come out this Friday.
Mark Hamrick, a senior economic analyst at Bankrate, commented in an analysis, “Federal closures are, by nature, counterproductive. Given the current economic uncertainty, this shutdown is poorly timed.” He added, “The postponement of key economic data like employment reports hampers the decision-making capabilities of consumers, investors, and policymakers.”
Why Do Job Reports Take Time to Calculate?
Measuring changes in employment for over 170 million American workers is no small feat. The BLS administers two surveys monthly to figure out how many jobs are added or lost.
The first, a household survey, calculates how many Americans are unemployed or not looking for work for various reasons, and it also breaks data down by demographics.
The second, known as the “establishment survey,” assesses job changes across various industries, including employee compensation and working hours.
Both surveys are conducted during a week in the middle of each month, but it often takes days or even weeks for responses to come in after the survey period has ended.
The BLS compiles these adjusted survey results into monthly job reports, which typically are released on the first Friday of the following month. These reports are not usually finalized until late Thursday afternoon.
If the BLS was on its usual schedule before the September report, it might not have even finished preparing it before the shutdown began at 12:01 AM on Wednesday.
When Will the September Jobs Report Be Available?
The BLS can start working on employment reports as soon as funding is restored, but that’s uncertain as of Wednesday afternoon.
With survey response rates dropping significantly and staffing issues resulting from the threat of layoffs during the shutdown, it’s unclear how long it will take BLS to complete the job report once it reopens.
What Were Economists Expecting for the September Employment Report?
Economists had anticipated the US job market would gain around 50,000 to 80,000 jobs following two disappointing reports. This figure marks a notable improvement from the monthly average of 29,000 jobs added this year, yet it still falls short of the approximately 100,000 jobs needed to stabilize unemployment.
What Other Data Might Be Impacted by the Shutdown?
In addition to employment reports, BLS also provides the Consumer Price Index (CPI), which tracks price changes and measures inflation.
It’s expected that the September CPI report won’t be released until October 15, two weeks after the shutdown began. While there might be a chance for a deal between President Trump and lawmakers before then, the duration for BLS to process price data and release reports on time remains uncertain.
The BLS is also set to release its third-quarter employment cost index report on October 31, an important metric for understanding what businesses are spending to retain and attract workers.
How Can We Gauge Economic Performance?
In the absence of BLS data, policymakers and corporate leaders are turning to private sector reports for guidance.
While there is a wealth of solid private sector economic data available, BLS statistics on employment and inflation are still viewed as the gold standard among analysts.
The lack of federal employment reports has shifted attention to the ADP National Employment Report, which, although less reliable, is providing some insights in this uncertain climate. Economists, nonetheless, caution that the ADP report has a mixed history in predicting BLS outcomes.
On Wednesday, the ADP report estimated that the private sector experienced a loss of 32,000 jobs in September.
