The Trump administration has issued a stark warning that two of the most vital snapshots of the American economy, the October Consumer Price Index and jobs report, may never see the light of day.
White House Press Secretary Karine Leavitt squarely blamed the record-breaking 43-day government shutdown for the potential data blackout, accusing Democrats of having "permanently damaged the federal statistical system".
Economic Fog Obscures Policymaking
Ms Leavitt stated on Wednesday that the shutdown, which began on 1st October, prevented data collectors from working, leaving "our policymakers at the Fed flying blind at a critical period".
This confirms the fears of economists who had anticipated that the key reports, essential for gauging inflation and the broader health of the world's largest economy, would be casualties of the funding impasse in Washington.
The White House did offer a sliver of clarity, confirming that September's jobs report will be published soon, as its data was gathered before the shutdown commenced. However, the fate of the October data remains sealed.
A History of Unwelcome Economic News
The most recent jobs report available from the Trump administration is from August, published on 5th September. It made for grim reading, revealing that the US economy added a paltry 22,000 jobs and that unemployment had climbed to a four-year high of 4.3 per cent.
This report was also notable for being the first labour market assessment released after President Trump's controversial dismissal of Bureau of Labor Statistics commissioner Erika McEntarfer. He had accused her of issuing "phony" numbers in the July report, which itself showed a weak addition of 73,000 jobs.
This is not the first time a government shutdown has clouded the economic picture. The aftermath of the previous record 35-day shutdown from late 2018 into January 2019 also brought bleak news, with hiring tumbling and the economy adding just 20,000 jobs in February 2019.
Consequences for the Federal Reserve
While the absence of disappointing October figures might spare the White House negative headlines in the immediate term, it creates a significant problem for the US Federal Reserve.
The Fed relies on this official data to make informed decisions on monetary policy, such as setting interest rates. Without it, the central bank is left navigating in the fog.
Federal Reserve Chairman Jerome Powell addressed the issue in late October, downplaying it as a "temporary state of affairs". He drew an analogy, asking, "what do you do if you're driving in the fog? You slow down," hinting that a lack of clear data could lead to a more cautious approach in their December meeting.
In the absence of government figures, the Fed may turn to data from private firms. A report from ADP indicated the US added 42,000 jobs in October, an improvement on August's official numbers but still far from robust.
The Independent has contacted the White House, the Bureau of Labor Statistics, and the Department of Labor for further comment on the situation.
