Talk to economists about the government shutdown’s impact on their forecasts and you’ll hear this phrase again and again:
For economists and investors, “at this moment, we are flying blind,” said Alan Greenspan, former chairman of the Federal Reserve and now president of Greenspan Associates LLC, a consulting firm.
Greenspan is not alone in feeling a little lost without the compass of government reports.
“We have not been collecting the data, so we are flying blind,” said Diane Swonk, past president of the National Association for Business Economics and an economist for Mesirow Financial, a financial services firm.
Even though federal offices were reopened on Thursday morning, government economists have not yet been able to pull together and release their long-delayed reports. For example, the Labor Department’s September employment report should have been released on Oct. 4. But when the government shut down on Oct. 1, it sent home the workers who should have been there releasing the statistics.
That employment report is very closely watched by investors. Its regular release — precisely at 8:30 a.m. — has the power to move markets.
So when will we see it again?
Your guess is as good as anyone’s. The Bureau of Labor Statistics website offers a calendar of report release dates, but the schedule has not yet been updated to reflect any post-shutdown changes. No one answers the phone.
At the Bureau of Economic Analysis, which issues reports on international trade, personal income and spending, the website read, “Please Note: BEA is currently assessing the impact of the shutdown and will post a revised release schedule as soon as possible.”
The government data points — and their release times — are crucial for making decisions about investments. At BLS alone, this month’s missing reports include those that measure wages, job creation, unemployment rates, import and export prices and consumer inflation.
Swonk said that while it’s frustrating to wait for the release of September data, it’s even more painful to think about the data that may never get collected for October.
She is especially worried about the monthly employment report because that one greatly influences Fed policymakers who set interest rates. If Fed officials don’t have BLS data, then they have to make very consequential decisions in the dark.
And this week — just as BLS employees get back to their desks — is crunch time for October data collection.
According to the BLS, the government learns about Americans’ job status when its “interviewers contact households by telephone and in person and ask questions regarding the labor market activity of household members during the previous calendar week which included the 12th day of the month—the reference week.”
In other words, right now is when phone calls need to be completed about last week’s jobs.
But will BLS have the manpower to assemble the delayed September report, and then conduct surveys for October? “It’s labor intensive to collect that information,” Swonk noted.
BLS officials cannot be reached to confirm what is happening.
Bottom line: October data may be skewed. And it may be a long time before anyone sees reliable numbers for September, as well as the crucial revisions for earlier months.
“You feel like you’re in a fog,” Swonk said.
Greenspan said he was relieved that the shutdown did not go on longer. “If we went another four or five weeks without these data, it would leave a hole in our capacity to understand what’s going on,” he said. But the 16-day shutdown, while not trivial, probably won’t distort data enough to have a major impact on the overall accuracy of 2013 economic readings, he said.
Robert Murphy, a Boston College professor and former senior economist for the Clinton Council of Economic Advisers, agreed that the shutdown ended in time to prevent long-term harm to economic forecasts.
He believes the BLS professionals will “scramble more” this month to round up the data as quickly as possible. But for now, “we’ll be flying blind for a bit,” he said.