White House says October inflation data unlikely to be released next month

Audio By Carbonatix

Enlarge

By Doina Chiacu and Lucia Mutikani

WASHINGTON (Reuters) -The White House said on Friday it had learned there likely will not be a release of inflation data next month due to the U.S. government shutdown, which could leave a gap in a data series stretching back more than a century.

An impasse between Republicans and Democrats in Congress has resulted in a widespread federal government shutdown, now in its 24th day, and has halted the publication of most data about the U.S. economy. 

“Because surveyors cannot deploy to the field, the White House has learned there will likely NOT be an inflation release next month for the first time in history,” the White House said in a statement.

The White House did not elaborate. The Bureau of Labor Statistics repeated earlier statements that apart from the recall of some staff to generate the Consumer Price Index for September, which was released earlier on Friday, all data collection and publishing activities have ceased for as long as the shutdown lasts.

About 700,000 federal workers have been furloughed while nearly as many are working without pay, which could force households to defer spending. Many are set to miss their first full paycheck on Friday.

The government’s CPI report for September was published on Friday in order to help the Social Security Administration calculate its 2026 cost-of-living adjustment for millions of retirees and other benefits recipients. It was initially due on October 15.

During the December 2018-January 2019 government shutdown, the longest on record, the BLS remained functional, allowing many key reports to still be generated. Some economic data from other agencies, such as the Commerce Department, was delayed.

Analysts and former policymakers have become increasingly worried that the wider nature of the current shutdown will result in a bigger impact on surveillance of the economy. While some had suggested an imputed report could be published based on limited data arriving at BLS even with no staff, others conceded it was likely that the report for October would be missed altogether.

“I think it’s almost inevitable now … ordinarily BLS would have been out there collecting the data for October since the first of October,” said Erica Groshen, a former BLS commissioner. “It’s possible they’ll be able to scrape something together, but that would be difficult, particularly when they’re understaffed, and they would have to redesign a lot of their systems to accommodate the lack of data.”

“Maybe they’ll figure out a way, but I think it’s very unlikely that we will get any inflation data for October,” Groshen said.

Some economists would prefer that BLS accept a lapse in the series than try to produce one with an even greater share of imputed data than seen recently.

Because the data is typically collected on a rolling basis throughout the month, “it would be a very imperfect CPI if they put it out,” said Steven Englander, global head of G10 FX research at Standard Chartered, who has been critical of the quality of BLS data for some time. “In some ways it might be better if they didn’t.”

“Yes we’ll miss a month’s CPI data and November might be messed up too, at least partially,” he said, depending on when the government shutdown ends and regular data collection can be restarted. But Englander added that U.S. economic data – though widely seen as the gold standard – actually has plenty of flaws already. A delay or gap in the data, particularly when there is no financial or economic crisis underway, is not catastrophic, he said. “It’s inconvenient, but it’s not the end of the world.”

(Reporting by Doina Chiacu and Lucia Mutikani in Washington; additional reportiong by Ann Saphir in San Francisco; Editing by Chizu Nomiyama and Paul Simao)