On first Fridays of the month, the U.S. government releases its much-awaited employment data, aka the “jobs report.” But not today. That’s because the federal government’s partial shutdown extends to key economic reporting agencies, such as the Bureau of Economic Analysis (BEA) and the Bureau of Labor Statistics (BLS).
Second only to GDP, the U.S. Unemployment Rate is one of the most closely watched indicators of our economy’s health. Does the market put too much emphasis on this report? Probably. And sure, we are getting a number of glimpses into the health of the jobs market through private agency reports, including the Gallup Job Creation Index, the ADP Employment Report, and the Challenger Job-Cut Report. So, we’ll make due with what we have.
However, the U.S jobs report provides a lot more than the unemployment rate. It also has data on these key items: how many workers are taking part-time jobs vs. the full-time jobs they want; the types of industries doing the most hiring and firing; how many folks dropped out of the labor pool in the last month. The report also allows us to compare WA State employment with the national job market.
Since unemployed people are less likely to buy things — and consumption is a key driver of U.S. economic growth — the latest employment snapshot provides key information on the state of our economy.
So the delay in key government economic data leads to greater ambiguity about the health of the U.S. economy, and it increases the uncertainty of market participants.