Federal Reserve Bank of Chicago President Austan Goolsbee has raised concerns about the potential impact of a government shutdown on economic data, particularly as the Fed prepares for its upcoming meeting in October. With a possible shutdown looming, Goolsbee mentioned that the central bank would have to turn to alternative data sources if crucial economic reports are delayed.
The threat of a shutdown is real, as Congress has yet to agree on a funding extension. While the House has passed a continuing resolution, progress has stalled in the Senate over debates about healthcare subsidies. If a shutdown occurs, the Labor Department’s Bureau of Labor Statistics will suspend all economic data releases, which would leave policymakers and the public in a difficult situation when trying to assess the economy.
Goolsbee expressed his dismay, stating, “The Bureau of Labor Statistics is the best source of data that we have. It pains me that we wouldn’t be getting official statistics at exactly a moment when we’re trying to figure out if the economy is in transition.”
Among the reports at risk are initial jobless claims and the nonfarm payroll data, which play a significant role in understanding economic health. The consumer price index, an important measure of inflation affecting everyday expenses, is also set to be released soon, further emphasizing the urgency for accurate data.
The Federal Reserve’s next policy meeting is scheduled for October 28-29, and the pressures of a potential data shortage may complicate decision-making for the central bank. Goolsbee highlighted that in the absence of official numbers, they would rely on alternative indicators, including hiring rates and private sector estimates, to forecast employment trends.
As the economy navigates these uncertain times, the need for clear and consistent data becomes even more crucial. The outcome of current political negotiations will have a lasting impact not only on policymaking but also on American families who rely on stable economic conditions.
