Missing ‘Gold Standard’ Economic Data Will Test Alternatives in US Shutdown

The imminent US government shutdown that threatens to delay the publication of key economic data will test policymakers’ and investors’ trust in a range of less-regarded third-party indicators.

Without critical figures like the Labor Department’s monthly employment report and a key inflation gauge from the Commerce Department, data from private-sector sources will take the spotlight. New trackers of job openings and economic activity have emerged in recent years, and well-established ones have reinvented themselves to better answer ongoing questions in the economy.

Some of these indicators — including gauges of business activity from the Institute for Supply Management, private payrolls from ADP Research Institute and existing-home sales from the National Association of Realtors — have informed Federal Reserve officials in their quest to tame the worst inflation in a generation. Others do so indirectly by feeding into government reports.

Instead of This Maybe Try That

Yet when any policy missteps could be enough to tip the world’s largest economy into recession, the Fed’s emphasis on decisions as “data dependent” becomes more precarious.

While officials had to rely on non-government measures in past shutdowns as well as early in the pandemic, economists generally regard those figures as less reliable than the Bureau of Labor Statistics, Census Bureau and Bureau of Economic Analysis releases that are set to be halted.