Just now, the US Bureau of Labor Statistics (BLS) made history in a different way by canceling the October jobs report. This remarkable announcement has sent shockwaves. This cancellation has serious repercussions for economic policymaking as it puts a damper on the flow of life-blood employment data. Instead of the expected October figures, the BLS incorporated some payroll data into a combined November report, which is now scheduled for release on December 16.
The cancellation couldn’t have come at a better time. The BLS has officially released the September jobs report, providing a clearer picture of the labor market only two months before a likely government shutdown. The report shows the US economy created only 119,000 jobs during the month of September. This came as a shock to most economists, who had expected a net loss of 4,000 jobs. This gap between what’s expected and what’s happening underscores the uncertainty in today’s economic environment.
This despite another blockbuster month of job growth in September, as the unemployment rate nevertheless rose to 4.4%. It increased from 4.3% the month prior to that. Payroll numbers for July and August were revised down by 33,000. Taken together, this is a big shift toward a much less rosy picture of past job growth. Together these changes paint a picture that, despite the positive gains in September, the labor market remains precarious.
After initial jobless claims recently ticked down to 220,000 last week, there are a few signs of stabilization in the labor market. Continuing claims increased in the first week of September, signaling a potential decline in long-term employment security. These trends together have produced a complicated and transformative picture for the US economy. From here, as it heads towards promising policy-making decisions, there are challenges and opportunities.
The highly anticipated November employment report takes on added significance in the wake of the October report being called off. This post was scheduled for a different, much earlier publication date. Instead, it will come just days before the Federal Reserve’s next decision-making meeting on December 10th. If left unaddressed, this timing could undermine the way that policymakers evaluate current economic conditions and decide where to raise interest rates and other elements of monetary stimulus.
Their cancellation of the October jobs report adds to the concern of these economists that markets are at serious risk of mispricing economic risks. Until we have timely and comprehensive data, investors and policymakers alike will have a difficult time getting an accurate read on the health of the labor market. The overreliance on obsolete or incomplete information, it is feared, would result in misinformed decisions that would exacerbate already fragile economic conditions.