Tags: Shutdown | Delay | Jobs | Data

Shutdown Would Delay Friday's Jobs Report, Other Data

Monday, 30 September 2013 05:08 PM

The Labor Department won’t release its monthly employment report if the federal government is closed on Friday, the day of the scheduled release, according to an Obama administration official.

The official, who wasn’t authorized to discuss the process and spoke on condition of anonymity, couldn’t say how the report might be affected if the government is shut down and re-opens before the end of the week.

The U.S. government is poised at midnight for its first partial shutdown in 17 years. Republicans and Democrats remained at odds at late afternoon over whether to tie any changes to the 2010 Affordable Care Act to a short-term extension of government funding.

The Bureau of Labor Statistics will suspend operations and close its offices Tuesday morning if there is a lapse in appropriations, Steve Barr, a Labor Department spokesman, said in an interview. The agency “will continue to assess the situation” in the event of a shutdown, he said. The bureau is an agency of the Labor Department.

The jobs report is closely watched for clues to Federal Reserve policy and the health of the economy. The central bank has said it will keep its benchmark interest rate near zero for at least as long as the unemployment rate exceeds 6.5 percent and the outlook for inflation is no more than 2.5 percent.

Employers probably added 181,000 workers to payrolls in September, according to the median forecast in a Bloomberg survey of economists. That would be the biggest gain in five months. The jobless rate is forecast to hold at 7.3 percent.

Agriculture Data

The Department of Agriculture will suspend crop and livestock reports during a shutdown. The National Agricultural Statistics Service will not issue reports while employees are furloughed from government duty, spokeswoman Sue King said in an e-mail. Reports suspended include those detailing global supply and demand for agricultural commodities, she said.

U.S. stocks slid on concern lawmakers will be unable to avert a shutdown. The Standard & Poor’s 500 Index fell 0.6 percent to 1,681.55 at the close of trading in New York. The benchmark gauge has added 3 percent this month, extending its quarterly gain to 4.7 percent, as the Fed kept its $85 billion of monthly bond-buying.

In contingency plans posted on its website last week, the Labor Department left open the possibility of publishing certain data compiled by BLS should a release be seen as part of an “orderly cessation of activities.” It cited the example of the 1995 federal government shutdown that occurred after consumer price index figures had been prepared and not yet released to the public.

‘Orderly Cessation’

The risk of disclosure of the data was considered unacceptable and releasing the report “was deemed to be part of the orderly cessation of activities,” Erica Groshen, commissioner of the BLS, said in the memo last week.

Suspending operations tomorrow wouldn’t involve releasing any economic data from the BLS, Barr said. Weekly data on claims for unemployment benefits, issued by the Employment and Training Administration, will continue to be published, according to the Labor Department’s plans.

Data supplied by private companies, including tomorrow’s Institute for Supply Management factory index and employment figures from the ADP Research Institute on Oct. 2, would not be affected, according to Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York.

“Our sense is that a disruption beyond 24 hours would result in a postponement of the jobs report, and in turn, the ADP report would take on far greater significance,” LaVorgna said today in a note to clients. If the BLS employment report is delayed, “we will be comfortable relying on the ADP series as a close proxy of September hiring.”

Growth Impact

A shutdown could reduce fourth-quarter economic growth by as much as 1.4 percentage points, depending on its duration, according to some economists. The biggest effect would come from the output lost from furloughed workers.

The U.S. Treasury Department would continue to release the results of its debt auctions in the event of a government shutdown, a department official said. The Treasury would keep paying interest on the government’s debt and maintain collections and daily cash management in the event of a shutdown, it said earlier.

The publication of the U.S. monthly budget statement may be delayed, said the Treasury official, who provided the information today on the condition of not being further identified. The next budget release, which provides updates on the U.S. federal deficit, is scheduled for Oct. 10.

Another Treasury report, the monthly statement on the cross-border flow of portfolio assets, planned for Oct. 16, may be delayed, said the department official.

Debt Limit

A brief government shutdown won’t lead to any significant change of the Treasury’s forecast for when the country will breach the debt limit, a spokeswoman said yesterday in an e- mail. The Treasury has said measures to avoid breaching the debt ceiling will be exhausted on Oct. 17.

The Commerce Department will suspend the release of economic data provided by its agencies in a shutdown, it said in its contingency plan. Data on construction spending, scheduled for release tomorrow, as well as factory orders, retail sales and gross domestic product are all reported by agencies within the department.

The Fed would continue to operate if the government shuts down because it’s a self-funded agency that doesn’t depend on congressional appropriations.

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The Labor Department won't release its monthly employment report if the federal government is closed on Friday, the day of the scheduled release, according to an Obama administration official.
Monday, 30 September 2013 05:08 PM
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