Unemployment Stats: Another Shutdown Casualty

WASHINGTON, DC-Yesterday the US Labor Department said the employment report for September will not be released on Friday morning due to the government shutdown. Furthermore, no new release date has been set.

"Due to the lapse in funding, the Employment Situation release which provides data on employment during the month of September ... will not be issued as scheduled on Friday," the notice read. "An alternative release date has not been scheduled."

To be sure, there are some heart-rending victims to the government shut down. The 800,000 to 1 million federal employees that aren't getting paid and may never be made whole, come to mind. So do the 8.9 million mothers and children under five that rely on the Special Supplemental Nutrition Program for Women, Infants and Children. In such context the monthly unemployment figures issued by the Bureau of Labor Statistics seem less important. But make no mistake--their absence will leave a serious information gap as companies and the public sector try to strategize.

The Federal Reserve Bank, for example, has said that it is less likely to begin tapering without this data. Countless companies in the private sector use the data for forecasting. It is also one of the few economic metrics, along with GDP, that consumers monitor as well.

There are, of course, alternative sources to provide decision-makers, both corporate and government, with some insight in this area.

Payroll processor ADP precedes the Labor Department's figures every month with its own pulse of the nation's workforce: For September, it reported that private-sector employers added 166,000 positions, fewer than the 180,000 economists had anticipated. Most of the job gains occurred in the service-providing sector.

Mark Zandi, chief economist of Moody's Analytics, weighed in on the figures, as usual. "The job market appears to have softened in recent months," he said in a prepared statement. "Fiscal austerity has begun to take a toll on job creation. The run-up in interest rates may also be doing some damage to jobs in the financial services industry."

The good news, he said, is even though job growth has slowed, "there remains a general resilience in the market. Job creation continues to be consistent with a slowly declining unemployment rate."

Challenger, Gray & Christmas also keeps track of this issue and it has reported that U.S.-based employers announced plans to reduce payrolls by 40,289 in September. That was down 20% from August, when job cuts reached a six-month high of 50,462. The September total was 19% higher than the 33,816 planned job cuts announced the same month last year, marking the fourth consecutive month that saw heavier job cutting than a year ago.

Those figures, however, don't have the same gravitas as the Labor Department calculations and the missing figures will almost certainly have a psychological impact on the markets and consumers, David Johnson, principal of Strategic vision, tells GlobeSt.com.

"It will have people wondering what is happening in the economy that they don't realize," he says. "People are pessimistic about the economy anyway and this reinforces this feeling that something is still not right."

Almost certainly the missing figures--along with other statistics too, presumably, if the shut down continues for a significant length of time--will cause businesses and consumers to put off major decisions and scale back spending and investment. "Businesses want to see hard data, information, statistics as they make decisions about hiring, about investment," Johnson says. "Especially if the shutdown goes on for a long period of time, they will be feeling very uncertain about what to do."

On the other hard, the shut down could end relatively soon. In which case, all this will wind up being is one missing data point, Charles King, principal analyst of Pund-IT, tells GlobeSt.com.

"Think of it as just one test in a battery of medical tests you have with a physical. Like, say, blood pressure, it is only one aspect of a broader and very complex ecosystem, in this case the human body."

In short, King says, the labor figures are interesting but they don't tell everything that you need to know about how the economy is doing. "They are important, but important within a broader context. For just one month, I don't think they will be hugely missed."