The government is beginning to reopen after President Donald Trump signed a House-passed funding package on Wednesday night, ending the record 43-day shutdown. But the White House has suggested the inflation and jobs data skipped during the shutdown may be permanently lost, just a few weeks before the Federal Reserve will weigh in on December rate cuts.
“The Democrats may have permanently damaged the Federal Statistical System with October CPI [Consumer Price Index] and jobs reports likely never being released,” White House Press Secretary Karoline Leavitt told reporters on Wednesday. “All of that economic data released will be permanently impaired leaving our policy makers at the Fed flying blind at a critical period.”
The government shutdown began on Oct. 1 and lasted almost two weeks into November as Republicans and Democrats clashed over spending packages and their inclusion of funding the Affordable Care Act’s enhanced premium tax credits, which are set to expire at the end of 2025, leading to potential spikes in premiums for millions of Americans. The Senate will vote on the issue next month, as part of the spending package that was just passed.
As the government begins to reopen on Thursday, official numbers on last month’s inflation and jobs that were presumed to be only postponed may never be released, according to the White House.
This would be the first time in history monthly government data for the economic indicators would be missed since they started being tracked. Staff members at the Bureau of Labor Statistics (BLS) were furloughed during the shutdown, preventing the agency from being able to collect data throughout October.
The Current Population Survey, established in 1948, is carried out jointly by the U.S. Census Bureau and the BLS, and polls about 60,000 households each month. The data collected from the survey is used to produce the BLS’ “Employment Situation,” a comprehensive official jobs report.
“For the first time in over 900 months, the Current Population Survey (CPS) may not gather monthly information from a representative sample of American households about whether they’re working or looking for work,” Friends of BLS, an independent coalition established by major statistical, business, and research organizations, wrote on its website on Wednesday.
Meanwhile, the BLS first published a national Consumer Price Index (CPI), or inflation data, in 1921, according to the Federal Reserve Bank of Minneapolis.
Despite the gap in data, an 80% majority of economists predict the Fed will cut rates by a quarter point on December 10, according to a Reuters poll of 105 economists. This would bring down rates to a range of 3.5% to 3.75%, marking the third quarter-point reduction in a row.
The last Fed interest rate cut was at its October meeting, where despite no monthly government data on jobs and inflation, Fed Chair Powell said the decision was made as signs pointed to a cooling labor market and moderating inflation.
Some economists see this trend continuing.
“The general sense is the labor market still looks relatively weak and that’s one of the key reasons why we think the FOMC will continue to deliver that December cut,” Abigail Watt, U.S. Economist at UBS, told Reuters.
Still, other economists aren’t so sure. Torsten Sløk, chief economist at Apollo Global Management, estimates the prices on 55% of items that make up the CPI are rising faster than 3%, outpacing the Fed’s target inflation rate of 2%.
“This is the reason why it is difficult for the Fed to cut interest rates in December,” Sløk wrote on Wednesday.
