Feb 6, 2019

The lingering effects of the shutdown on economic data

Illustration: Rebecca Zisser/Axios

The economy is slowing down. But no one is entirely sure by how much.

The big picture: It's been harder than usual to determine for the U.S. because the 35-day government shutdown pushed back or halted important economic releases that inform policymakers and market participants.

Driving the news: This short week has already produced some less-than-stellar shutdown-delayed data points.

  • The November reading of U.S. factory orders was -0.6%, missing expectations by almost a full percentage point.
  • November's durable goods orders also missed economists' expectations by nearly a percentage point.
  • Both surveys were released on Monday, 2 months behind schedule.

Tuesday's reading on the health of the consumer sector, the ISM non-manufacturing index, was the lowest since July.

  • Employment rose but business activity was one-and-a-half points lower, new orders fell to the lowest in 13 months and new export orders fell 9 points to the lowest in 2 years.

What they're saying: "It's possible, if not likely, that the economy weakened during the shutdown and the data that would have given us a heads up on the turn in the economy was unreported because of the shutdown," Lou Brien, market strategist at DRW Trading tells Axios.

Remember: Consumer sentiment data has been substantially weaker of late, and as Charles Schwab fixed income analyst Kathy Jones noted yesterday, it can take 3–6 months for economic data to catch up to sentiment.

  • "The more the hard data softens or gets weaker the more concerned we get," Jones says.

For now, anxious investors are left waiting for data like factory orders, home sales, business inventories and international trade figures from November and December.

  • The December retail sales report, tracking the health of the American consumer during the crucial Christmas holiday shopping season won't be released at all because of the shutdown.
  • The advance economic indicators report for November also has been canceled,

Be smart: New dates have yet to be announced for the advance fourth quarter GDP report, December personal income and spending data and the December international trade report.

  • "Some of the recent private sector data was notably weak and now we wait for the government statistics to catch up and reveal a fuller description of the economy," Brien said.
  • "We need more data and time to see if this is a wiggle or a new trend."

Go deeper: The shutdown's effect on economic data

Go deeper

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 2:30 p.m. ET: 905,279 — Total deaths: 45,371 — Total recoveries: 190,710Map.
  2. U.S.: Total confirmed cases as of 2:30 p.m. ET: 199,092 — Total deaths: 4,361 — Total recoveries: 8,362Map.
  3. Federal government latest: Vice President Mike Pence said that White House modeling suggests "Italy may be the most comparable area to the United States" in terms of coronavirus impact.
  4. State updates: Florida and Pennsylvania are the latest to issue stay-at-home orders, totaling 34 states and Washington, D.C.
  5. 2020 update: West Virginia is latest state to delay its primary — Bernie Sanders urged Wisconsin to delay April 7 primary.
  6.  🎧 Podcast: The Defense Production Act
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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West Virginia is latest state to delay primary due to coronavirus

Photo: Barbara Davidson/Getty Images

West Virginia Gov. Jim Justice rescheduled the state's May 12 primary election to June 9 on Wednesday, citing fears surrounding the coronavirus pandemic, AP reports.

Why it matters: 23 other states and the District of Columbia haven't held primaries yet. The White House is recommending, for now, that Americans practice social distancing and gather in groups of no more than 10 people — while many states have issued stay-at-home orders.

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