Jobs Data Integrity at Risk in Prolonged U.S. Shutdown
By Carlos Torres and Victoria Stilwell - Oct 9, 2013
The integrity of U.S. data on joblessness, one of the main measures of the strength of the economy, is at risk the longer some government agencies remain closed, according to former Labor Department officials.
Workers at the Census Bureau this month would normally begin canvassing households, starting on Oct. 13, to ask people if they were employed during the previous week. A delay caused by the partial government shutdown means Americans will be reaching further back into their memories to come up with answers, raising the possibility that some responses used to derive the unemployment rate will be inaccurate.
“I’m really worried not just about possibly missing data, but I’m worried about muddying the signal even after we are back to collecting the data,” Katharine Abraham, commissioner for the Bureau of Labor Statistics from October 1993 to October 2001, said in a telephone interview. “If you collect the information too late, you know the information is not going to be reliable.”
Any suspicion about the dependability of the figures and the likely economic damage caused by an extended shutdown gives Federal Reserve officials reason to delay trimming their $85 billion-a-month in bond purchases, said Dean Maki, chief U.S. economist at Barclays Plc in New York, and a former Fed researcher. Central bankers have cited the unemployment rate as one of the thresholds they’ll use to determine when to stop pumping more money into the economy and eventually raise their benchmark interest rate.
Fed Policy
“The Fed is making a big point that it’s data-dependent, but data dependence only works if there are data releases coming out,” Maki said in an interview. “The data vacuum could push the Fed to wait. It could conceivably affect a December taper if the shutdown were to last long enough.”
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http://www.bloomberg.com/news/2013-10-09/jobs-data-integrity-at-risk-in-prolonged-u-s-shutdown.html