Lack of data on government shutdown blurs US economy insights

The first Friday morning of each month is typically greeted by a quiet hush around 8:30am Eastern time in the US [12:30 GMT] as everyone awaits the Labor Department’s crucial monthly jobs report, from Wall Street trading floors to the US Federal Reserve to economists sipping coffee in their home offices.

No details were made available on Friday regarding hiring in September as a result of the government shutdown.

The lack of data is occurring at a time when Wall Street investors and the Federal Reserve would prefer to have more than less data on the economy. The economy is nearly halting as a result, which could depress it further. Consumers, especially those with higher incomes, are still spending, and some companies are increasing their investments in data centers creating artificial intelligence models. It’s still to be seen whether that will bring back hiring.

The jobs report has been delayed for the first time since a government shutdown in 2013. One of the several agencies that Congress had authorized to fund continued to operate during the 2018-2019 partial government shutdown was the Labor Department. Once the shutdown is over, September’s employment statistics will be made public.

Democrats have filed similar charges against the White House, while the administration of US President Donald Trump has blamed the administration for the shutdown.

Because the Democrats’ government shutdown has prevented the release of crucial economic data, “businesses, families, policymakers, markets, and even the Federal Reserve are flying blind at a crucial moment in America’s economic recovery,” according to White House spokesman Kush Desai.

Despite providing an unflattering picture of the economy, Trump has frequently trashed government jobs data&nbsp. After the Bureau of Labor Statistics announced that job gains in May and June were significantly lower than previously anticipated, he fired&nbsp, the then-head of the organization.

alternative data sources

For the time being, economists are turning to alternative survey tools provided by nonprofits and private-sector businesses. Most of those indicators indicate a job market with few hiring and few layoffs. People who work appear to be most secure, whereas those who seek work are having more difficult times.

For instance, payroll provider ADP reported on Wednesday&nbsp that its estimate showed the country lost a surprising 32, 000 private-sector jobs last month. According to ADP, jobs are lost in all businesses in the financial services, manufacturing, and construction sectors. Additionally, workers are lost at hotels and resorts as well as in industry sectors like accounting and engineering.

Only the sectors with the most employees, according to ADP, were those in the fields of healthcare, private education, and information technology.

The hiring trend has declined significantly over the past year, according to Chief Economist Nela Richardson of the ADP. This is in line with a low-hire, even no-hire, and low-fire economy.

The government isn’t making the weekly count of how many Americans have applied for unemployment benefits, a job-related proxy, that is released on Thursday as a result of the shutdown.

However, Goldman Sachs based its own estimates of unemployment claims on information from the majority of the states. According to a report released late on Thursday, weekly claims increased to 224, 000 from the previous week’s 218, 000. These are historically low numbers, which suggests that most of the workforce is still being held by businesses.

The Institute for Supply Management, a trade group of purchasing managers, released its monthly report on economic activity in the services sector, which covers roughly 90% of the economy and includes everything from banking to restaurants to retail stores to warehousing. The dividing line between shrinking and expanding is now 50, with the index down to 50 from 52. That indicates that last month’s activity in the services sector was unchanged.

According to the ISM survey, services businesses cut back on hiring for the fourth consecutive month, which suggests that job growth remained subdued last month.

Additionally, a new alternative measure it unveiled last month, the Federal Reserve Bank of Chicago, on Thursday, released its monthly forecast of unemployment. According to the Chicago Fed, the unemployment rate remained at a record low of 4.3 percent as of September.

Source: Aljazeera