Delays in US Jobs Data Weaken the Quality of US Policymaking

This was the first time ever the US Bureau of Labor Statistics had cancelled a jobs report – opting rather to incorporate some of the payroll figures from October within a combined November report. A move like this reduces the transparency around the health of the American economy. In addition, the agency has not as yet announced any decision around when or if the October inflation report may be released.

Such restrictions around data availability increase risks of markets mis-pricing risk – at a sensitive time when there are already concerns of bubbles forming in US and global markets.

Furthermore, for decision makers responsible for steering the US economy – whether through monetary or fiscal policy – such data delays confound and undermine the quality of policymaking. The November employment report is to be published only on 16 December, more than a week later than originally scheduled, and not until after the next Federal Reserve decision on 10 December.

The Belated September Jobs Report Suggests a Slightly Stronger Labour Market Than Many Assumed

The belated release of the September jobs report on Thursday did give one a delayed sketch of the state of the economy two months ago before the government shutdown. Employers added 119,000 jobs during the month – more than double economist estimates and better than the 4,000 jobs lost during the month before. A rise in the size of the workforce furthermore came against the outstanding narrative of shrinking supply. Furthermore – initial jobless claims fell to 220,000 last week – matching the lowest since September.

The unemployment rate, nevertheless, edged up to 4.4% in September from 4.3% a month before (Figure 1). In addition, payrolls were revised down 33,000 for July and August whereas continuing claims rose early this month.

Figure 1. US unemployment rate, with Scope Ratings forecasting

% year-over-year

The recent jobs data may in aggregate suggest a slightly stronger labour market than many have assumed.

But – ultimately – the data are already dated. Facing a finely balanced decision, the Federal Reserve next month may need to rely on further signals from state-level and private-sector data given the delays or cancellations of many of the data series on which it has typically depended upon the most.

For a look at all of today’s economic events, check out our economic calendar.

Dennis Y. Shen is the Chair of the Macro Economic Council and Lead Global Economist of Scope Ratings. The rating agency’s Macroeconomic Council brings together the company’s credit opinions from multiple issuer classes: sovereign and public sector, financial institutions, corporates, structured finance and project finance.