By John Q. Hosedrinker 
Due to the 43-day federal government shutdown, the Labor Department will not release a complete jobs report for October. The department was unable to calculate the unemployment rate and other key numbers because of the shutdown. However, it will release the number of jobs created in October alongside the full November jobs report, which is now scheduled for December 16th. The September jobs report, which will be released Friday, will likely receive extra attention as it is the last full measurement of hiring and unemployment that Federal Reserve policymakers will see before their meeting in December.
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The Labor Department won’t release a full October jobs report, a casualty of the 43-day federal shutdown, and this is a pretty significant development. It’s not every day we see the entire economic picture of a month go unpainted, so let’s break down what that means and why it’s happening.
This news means that instead of getting our usual dose of the monthly “employment situation” report – the one that typically lands on the first Friday of the month – we’re only getting a partial picture. We’ll still get the key number: how many jobs employers created in October. However, we won’t get the full enchilada, which includes the unemployment rate and other important metrics. This is because the shutdown prevented the Labor Department from conducting a crucial survey of households that’s used to calculate the unemployment rate. They just couldn’t do it, and, to add to the problem, they can’t go back and get the data.
So, why does any of this matter? Well, the monthly jobs report is a critical piece of the puzzle for understanding the health of the economy. It gives us a snapshot of how businesses are doing, whether people are finding work, and how much their paychecks are worth. Policymakers at the Federal Reserve, for instance, use this data to make decisions about interest rates, which can impact everything from mortgages to business loans. The fact that they won’t have the full picture for October, and that it’s all delayed, throws a wrench in the gears of that process. The September report, now being released, will likely face extra scrutiny since it’s the last full assessment before the next Federal Reserve meeting, where rate decisions are made.
The timing of this is also important. The shutdown happened right as the economy was likely starting to show signs of trouble. It’s not like the October numbers are going to magically be good, and the missing data only exacerbates concerns about economic performance. As it is, the market watchers are all on edge about the September numbers, and if those numbers are bad, then the picture is going to look even worse when you consider all of the disruption.
It’s understandable to wonder if there’s more to the story. Is this a deliberate attempt to hide something? The Labor Department, to their credit, has been upfront about the situation. They’re saying the shutdown directly caused the problem, and there’s no conspiracy afoot. They were simply unable to gather the necessary data. The shutdown meant that field staff was out of commission for over a month. They could collect the payroll information from companies retroactively, but the household survey data is lost because they couldn’t do it after the fact.
There are many points being raised that are reasonable. Some folks have pointed to the importance of the government’s role in the economy and how a shutdown undermines that role. Others have remarked on the damage of bad policies and what they think is likely to be a poor outcome when the report does come out. Then there’s also the concern that the administration may have been hiding bad news, a fear that has been voiced before in similar situations.
Regardless of your thoughts on the political climate, the situation shines a light on the fragility of our economic data collection. It also highlights the far-reaching consequences of government shutdowns. It affects the economy, the people who work in the federal government, and everyone who relies on accurate economic information to make important decisions.
For example, the surveys are the best way to get a good picture of the labor market. While some might think that the government could just compile data from state unemployment agencies, that approach isn’t quite as simple as it seems. There are lots of people who are not eligible for unemployment benefits, like gig workers or people employed in certain types of jobs. Also, state cooperation would vary, and these surveys aren’t a good source of data.
It’s tempting to think that since the government collects so much data, it should be able to figure out who’s employed and who isn’t. The IRS has a record of taxes paid. But this information only provides a partial picture. It doesn’t capture those looking for work, those underemployed, and those working off the books. In the end, the household surveys are the most reliable method we have, and the inability to conduct those surveys means we’re left with an incomplete view of the economic landscape.