How to measure the economy when the government isn't doing it
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Everything's an economic indicator these days — from offbeat numbers on restaurant reservations and visits to the Statue of Liberty to more standard info on job listings.
Why it matters: Companies and investors are scrambling for alternatives to the data put out by the Bureau of Labor Statistics, which halted almost all releases in the government shutdown.
- Businesses use the numbers to make big decisions about hiring, firing, prices, spending — even figuring out what goods to sell to consumers.
- Policymakers use government data to make big decisions as well: from unemployment insurance to nutritional assistance and raises for Social Security recipients.
Zoom in: A few days after the shutdown started, Apollo Global Management put out a 75-page PDF stuffed with charts tracking all kinds of data put out by the private sector:
- To figure out consumer spending, they suggest looking at: OpenTable data on restaurant reservations; weekly hotel occupancy numbers; Broadway show and movie attendance — even visits to Las Vegas.
For a read on the job market, there are a lot of alternatives, too, many more conventional:
- Jobs site Indeed tracks the number of job listings, ADP has data from Americans' paychecks.
Where it stands: Morning Consult, a private data firm, says there has been a surge in interest from business clients — including a "hockey stick" increase in visits to its webpage tracking jobs and labor data.
- "It's been intense," says John Leer, Morning Consult's chief economist.
The big picture: The BLS shutdown comes at a particularly inopportune time — when the economy is shifting rapidly, partly due to big policy changes from the White House like tariff increases and the immigration crackdown.
- The labor market is also slowing considerably. "We're at a very challenging time in terms of understanding where we are in the business cycle," Leer says.
Zoom out: There's no shortage of ways to measure the economy, and this was true long before the shutdown started.
- This became clear during the pandemic, when the economic ground was shifting minute to minute. Suddenly, toilet paper sales, port activity and hotel reservations were vital to understanding exactly what was happening.
- More recently, on TikTok, finding recession indicators became a meme. Weird ones include the return of Lady Gaga and knee-high Converse sneakers.
Flashback: There also have been some fun indicators used over the years by economists and business journalists desperate for colorful and relatable ways to talk about the economy.
- Monitoring men's underwear sales (a decline is a recession indicator according to former Federal Reserve chair Alan Greenspan).
- The lipstick Index — sales rise in downturns as women splurge on small luxuries.
- Even looking at garbage can tell you something about the economy. We produce more when times are flush.
Yes, but: The BLS did decide that some data was just too important to pause.
- On Friday, the agency said it would release its monthly Consumer Price Index report, albeit a bit late, because it is crucial to determining annual cost-of-living increases for millions of Social Security recipients.
- Economists and investors generally believe that there is no real good substitute for the data tracked by the BLS — it's considered the gold standard.
The bottom line: There's a lot of fun economic data out there, but no real substitute for the official version.
