Government shutdown delays jobs report. What data economists are tracking instead

What did ADP’s September employment report show?

How might delayed data affect Fed rate decisions?

Which private data sources are economists using?

The government shutdown delayed the Bureau of Labor Statistics jobs report, “arguably the most important piece of information” for the Federal Reserve to review before its meeting at the end of the month, according to Bank of America Global Research economists.

The jobs report was due out Oct. 3. However, the federal shutdown forced the bureau to furlough employees as well as pause data collection and dissemination. If the shutdown lingers, it could also postpone the bureau’s next Consumer Price Index report, a key benchmark for inflation, expected Oct. 15. 

While BLS releases are widely viewed as gold standard of economic data, the Fed and economists rely on a broad range of reports to gauge the health of the economy. 

“At this point, while it’s an incomplete picture, we’re not flying completely blind,” Mike Skordeles, head of U.S. economics at Truist, told USA TODAY. “Obviously, if the shutdown drags on for longer than a week or so, that stale data makes it harder get an accurate picture of the economy.”

Mark Hamrick, a Bankrate senior economic analyst, said in an Oct. 3 note the jobs report "was expected to show about 50,000 jobs added to payrolls, with the unemployment rate remaining at 4.3%."

The data delay comes at a time when economists were looking for signs of a rebound in the job market after months of disappointing reports and when the Fed is expected to announce at least one additional rate cut before the end of the year to stimulate growth.

What other data can economists consider?

In 2019, a report to the Federal Open Market Committee acknowledged a then-ongoing partial government shutdown’s impact on releases, saying that “the model places more weight” on non-government surveys when BLS data is unavailable. 

Still, “it is a very big deal” to not have the BLS’ jobs report, according to Jobs for the Future CEO Maria Flynn, who served as a senior official in the Department of Labor during the Clinton and Bush administrations. 

“We have been here before, but it is very rare,” Flynn said. “The fact that it is happening at a time where we have seen the role of the Bureau of Labor Statistics be politicized in ways that I personally haven’t seen before, I think, makes it even more concerning.”

Without fresh government data, Flynn said businesses can turn to reports from job boards including Zip Recruiter, Indeed and LinkedIn, as well as data from Lightcast, a real-time labor market information provider.

There are other releases economists have their eyes on, like the ADP’s National Employment Report, which published Oct. 1 and found private employers shed 32,000 jobs during September.

Skordeles said some private sources economists examine include freight data from ports and railroads, industry group data from organizations like the National Association of Realtors, and earnings reports from public companies. 

Homebase’s September Main Street Health Report on small business labor trends, found workforce participation fell 3.6% and hours worked declined 4.7%, closely mirroring late-summer declines in 2023. While the report focuses on small businesses that primarily employ hourly workers, Homebase CEO John Waldmann said it can offer early signals about broader economic conditions. 

“We started sharing data publicly during COVID because we were seeing real-time signals so early in the pandemic of the impact on local economies, so we were trying to raise the alarm everywhere,” Waldmann said. “Small businesses have traditionally provided most of the job growth in this country. I think as you look at the technology and labor market changes ahead of us, their role in providing jobs in this country is only going to be more important.”

Why economists are still waiting on government data

Sometimes non-government reports contradict one another, which makes the absence of BLS data a challenge, Flynn said.

“It’s always good to be able to triangulate the data and compare and contrast across difference sources,” Flynn said. “If you’re taking one leg of the stool out of the equation, and it is the public sector government-sponsored leg of the stool, then I think it does start to open things up for more interpretation.” 

Government-sourced data is the best available in many cases, and the only source in others, according to Skordeles. 

“For instance, there aren’t a lot of comprehensive inflation data series outside of pricing statistics for narrow slices of the economy, like auto data from Manheim or existing home prices from NAR,” Skordeles added.

The shutdown’s duration is unknown, though the longest in U.S. history lasted 35 days. Flynn noted that if economists were without government data for more than three months, it could fundamentally change some of the assumptions behind their analyses and the reliability of their decisions. 

She added the jobs report matters to everyday Americans because it helps inform the Fed’s interest rate decisions, affecting loans, credit cards, and other borrowing costs. It also highlights “the important role federal statistical agencies play in guiding our economy.” 

“If they themselves or anyone in their family is looking for a different job, they need information to really help make those decisions about their best next step,” Flynn said. “Having government-backed data is a critical piece of that puzzle.”