Copyright The Street
The experts call it a “data fog,” or even “flying blind.” The government shutdown has shuttered monthly leading economic indicators. Markets, economists, and even the Federal Reserve are now turning to private sources of data to determine the state of the economy. Here’s what has closed since the shutdown began Oct. 1: The Bureau of Labor Statistics The Census Bureau The Bureau of Economic Analysis The longer the shutdown lasts, the more data could be corrupted. State and private sources are filling some of the void. The ADP National Employment Report released Nov. 5 showed a surprising change in private-sector employment in October. What the ADP report measures The ADP payroll report is an independent measure of the labor market based on the anonymized weekly payroll data of more than 26 million private-sector employees in the United States. ADP’s Pay Insights captures over 15 million individual pay change observations each month. Together, the jobs report and pay insights provide a representative and high-frequency picture of the private-sector labor market. What the October ADP report shows Private-sector employment increased by 42,000 jobs in October, and pay was up 4.5 percent year over year, according to the October ADP report. October delivered a rebound from two months of weak hiring, but the bounce wasn’t broad-based. Education and health care, along with trade, transportation, and utilities, led the growth. For the third straight month, employers shed jobs in professional business services, information, and leisure and hospitality. “Private employers added jobs in October for the first time since July, but hiring was modest relative to what we reported earlier this year,” said ADP Chief Economist Nela Richardson. “Meanwhile, pay growth has been largely flat for more than a year, indicating that shifts in supply and demand are balanced,” she added. Payroll changes by industry Goods-producing: 9,000 jobs Natural resources/mining: 7,000 Construction: 5,000 Manufacturing: -3,000 Service-providing: 33,000 jobs Trade/transportation/utilities: 47,000 Information: -17,000 Financial activities: 11,000 Professional/business services: -15,000 Education/health services: 26,000 Leisure/hospitality: -6,000 Other services : -13,000 Job changes by U.S. regions Northeast: -12,000 New England: 7,000 Mid-Atlantic: -20,000 Midwest: 9,000 East North Central: 2,000 West North Central: 7,000 South: 6,000 South Atlantic: -8,000 East South Central: 11,000 West South Central: 3,000 West: 40,000 Mountain: 2,000 Pacific: 37,000 Fed officials rely on alternative sources of labor-market data Federal Reserve Gov. Lisa Cook said in prepared remarks Nov. 3 that the Federal Open Meeting Committee relies on a wide variety of data from administrative sources and various private-sector providers to continually evaluate the state of the economy in real time. “That practice has become essential in recent weeks given the lack of official releases. These data include alternative measures of inflation, labor-market activity, and production and spending,’’ Cook said. “For example, states continue to report data on unemployment insurance (UI) claims, and online job boards provide data on available positions,’’ she added. Cook voted in favor of a quarter-point cut in the benchmark federal funds rate Oct. 29. Two colleagues on the Federal Open Market Committee dissented. ‘’I viewed that decision as appropriate, because I believe that the downside risks to employment are greater than the upside risks to inflation,’’ Cook said.
