US government shutdown would delay release of key economic data, official says

by | Sep 25, 2023 | Business

By Lucia Mutikani

WASHINGTON (Reuters) – The publication of major U.S. economic data, including employment and inflation reports of critical importance to policymakers and investors, will be suspended indefinitely should the federal government shut down at the end of this week because of lack of funding, a government official said.

The suspension of the reports would occur across all government agencies such as the Labor Department’s Bureau of Labor Statistics (BLS) and the Commerce Department’s Census Bureau and Bureau of Economic Analysis (BEA), and leave policymakers at the Federal Reserve, investors, businesses and ordinary Americans in the dark as they make key decisions.

Congress so far has failed to pass any spending bills to fund federal agency programs in the fiscal year starting on Oct. 1 amid a feud within the Republican Party. Leaders in the Republican-controlled U.S. House of Representatives were due to try to advance steep spending cuts this week that stand no chance of becoming law, bolstering the prospect of a shutdown on Sunday.

“Under a lapse, the Bureau of Labor Statistics would cease all program operations, only publishing completed data scheduled for release as part of orderly shutdown activities,” a Biden administration official, speaking on background, said in response to questions from Reuters. “As a result, the September jobs report and the Consumer Price Index would not be released.”

The Labor Department is currently scheduled to release the next monthly employment report on Oct. 6. The CPI report is due on Oct. 12.

The approach is a change from the last government shutdown between December 2018 and January 2019, which did not affect the Labor Department and allowed the BLS and its Employment and Training Administration to continue publishing data. That means the unemployment insurance weekly claims data will also not be published during any shutdown this time.

“Most services provided by the Census Bureau would cease, including production of Economic Census data, production of economic indicators, and work on the American Community Survey,” the official said.

That means delays in the release of key data, including the retail sales, housing starts and new home sales reports for September. Depending on the duration of the shutdown, the release of the first estimate of third-quarter GDP due in late October could also be delayed.

The September reports for durable goods orders, advance economic indicators, consumer spending, income and the key inflation data closely watched by Fed officials also would likely be impacted.

A data blackout would come at a critical juncture for Fed officials, who opted not to raise interest rates last week but remain on guard to take more action if necessary to further rein in inflation.

As a self-funding agency, the Fed would continue to release data, policy statements and other reports. The U.S. central bank is due to release the minutes from its Sept. 19-20 policy meeting on Oct. 11.

(Reporting by Lucia Mutikani; Editing by Dan Burns and Paul Simao)



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