How a government shutdown could impact the jobs report
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Illustration: Sarah Grillo/Axios
A shutdown of the federal government could come as soon as Wednesday.
Why it matters: While shutdowns don't typically drag down the stock market, they can delay the economic data Wall Street tightly monitors for clues about monetary policy.
State of play: The September jobs report from the Bureau of Labor Statistics is expected to be released on Friday.
- The payroll survey behind that report is done by end of day Tuesday and processed Wednesday (the day the government may shut down).
What they're saying: "My guess is that the BLS would go ahead and release it on Friday," says Erica Groshen, who was commissioner of the BLS during a multi-week shutdown in 2013.
- The bigger concern may be the Oct.15 Consumer Price Index report, which includes data that's collected on an ongoing basis.
- If a shutdown persists, the CPI print "could be delayed by, say, a week," Groshen tells Axios. "They'd need more time to make up for the collection that they didn't have at the beginning of the monthly cycle."
- Social Security could also be impacted, because the inflation numbers from the BLS are used to inform payments for the next year.
- When asked if she thinks that's likely, Groshen says, "Sure, it depends on how long it lasts."
Reality check: The shutdown comes after President Trump fired former BLS commissioner Erika McEntarfer after a jobs report indicated much fewer jobs were added to the economy than much of Wall Street had anticipated.
- Given the shutdown's proximity to the labor report's planned release, Trump could "perhaps try to influence the narrative that is written" at the top of the jobs report, she said, though in the normal BLS process the president would not receive the jobs data until Thursday.
Threat level: The White House is planning to use the shutdown to prepare plans for mass firings at federal agencies.
- These plans create "a not insignificant risk" of a larger impact, including "a drag on the economy unlike any shutdown before," Bob Elliott, chief investment officer at Unlimited Funds, wrote in a note.
The bottom line: The market is sanguine about the potential of a shutdown, for now.
- But without the economic data, investors can't enjoy their favorite hobby: predicting the path forward for interest rates.
