Government Shutdown Is Over, So Where Is the Economic Data?
The government is back. Government data, however, will have to wait awhile.
The partial government shutdown left forecasters, investors and policymakers without much of the data they rely on — just as concerns were mounting that the United States’ decade-long economic expansion could be nearing its end.
Now the shutdown is over. But it will take government statisticians time to collect and analyze figures for retail sales, manufacturing, housing and other parts of the economy that were delayed during the monthlong pause in operations. The Commerce Department will almost certainly be forced to delay the release of estimates of gross domestic product for the fourth quarter, scheduled for Wednesday.
That means that when officials gather Tuesday and Wednesday for a meeting of the Federal Reserve’s policymaking group, the Federal Open Market Committee, they will do so without access to much of the information they usually have. The timing is awkward: Fed officials have emphasized in recent months that with the economy’s direction uncertain, they will be paying particularly close attention to the latest data when making decisions on interest rates and related matters.
“The F.O.M.C. have told us that policy has become increasingly data dependent, but what data?” said Joel Prakken, chief United States economist for Macroeconomic Advisers, a forecasting firm.
In practice, the central bank had already indicated that it did not plan to raise rates at this week’s meeting. But it isn’t just the Fed that is struggling with the lack of government reports. Economists, investors and business leaders have all been left without a clear view of the economy.
“We’re missing a lot of key releases at a time when the economy appears to be slowing,” said Nancy Vanden Houten, senior economist for Oxford Economics. “We’re missing data on retail sales at a time when it would be great to see if the shutdown is having an impact on consumer spending. We’re not getting trade data at a time when we’re in a trade conflict with China.”
Economists haven’t been flying completely blind. The Labor Department was unaffected by the shutdown, which meant that the Bureau of Labor Statistics was able to collect and release inflation, unemployment and hiring estimates as usual. The monthly jobs report, arguably the most closely watched indicator each month, will come out Friday as planned. And economists still had access to privately collected statistics on housing, consumer sentiment and other topics.
Still, the pause in funding mostly shuttered the Commerce Department, which houses the Bureau of Economic Analysis and the Census Bureau. That resulted in the delay of several closely watched reports. Last week, the Conference Board published its index of leading indicators — meant to be a sort of early-warning system for downturns in the economy — without three of its usual 10 components.
It isn’t clear how long it will take government releases to get back on schedule. The answer will probably vary: Data on building permits, for example, is collected by local officials and submitted to the Census Bureau; as a result, the government should be able to gather the information and produce estimates relatively quickly. Retail sales figures, however, are based on a monthly survey that wasn’t conducted during the shutdown.
On Monday, the Bureau of Economic Analysis said it was consulting with the Census Bureau and other agencies and could not “say anything definitive about release dates” at this time.
The trickiest report is also arguably the most important: gross domestic product. The broadest measure of goods and services produced in the economy, G.D.P. is based on more than a dozen indicators, including several of the reports that were delayed. That means the government won’t be able to produce its estimate until nearly all the other data has been collected, making a delay virtually inevitable.
It is possible the Commerce Department could end up skipping the initial estimate of G.D.P. and wait until late February, when it would ordinarily release the first of two revised estimates. That’s what happened after the 1995-96 shutdown, the previous record-holder for the longest shutdown.
The greater risk is that the delays in data collection could hurt the quality of the statistics once they are produced. Government surveys are meant to be conducted the same way, at the same time each month, to ensure that the data are consistent over time. Changes can raise the risk of errors, said Maurine Haver, president of Haver Analytics, a data provider.
“Surveys just simply aren’t being done, and in some cases will never be replicated,” Ms. Haver said.
Economists said the shutdown had most likely ended before serious damage was done. Most major releases will be delayed by weeks, not months. Still, disruptions like these could have longer-run consequences for the confidence people have in government statistics, said Tara Sinclair, an economics professor at George Washington University.
“The U.S. is really considered the gold standard in data for the rest of the world, and we’re kind of falling down on our job here,” she said.