Employment Report Blackouts: What Government Shutdowns Tell Us About Data Reliability

The US government shutdown of 2019 highlighted a familiar phenomenon: employment report blackouts. For four days in January, the Bureau of Labor Statistics (BLS) suspended its release of critical labor market data, including nonfarm payroll numbers and unemployment rates. Several previous shutdowns have seen similar interruptions to employment reporting.

During a government shutdown, many federal agencies continue to operate under Title 31 of the US Code, which allows them to maintain essential services. However, this exception does not necessarily apply to the collection and reporting of employment data. The BLS relies heavily on funding from Congress to collect and process payroll information from employers across the country. When government funding is withdrawn, these activities can be severely disrupted.

Employment reports provide essential insight into labor market conditions, influencing business decision-making, investor confidence, and monetary policy decisions. Without this data, policymakers must rely on incomplete or outdated information, which can lead to suboptimal choices that harm economic growth.

Past instances of employment report blackouts during government shutdowns have highlighted the challenges faced by federal agencies in maintaining critical services. In 2013, a 16-day shutdown resulted in the suspension of BLS reports for over two weeks. Similarly, during the 2018-19 shutdown, the Bureau’s website was taken offline, and all scheduled releases were cancelled.

The 1995 government shutdown saw the BLS suspend its employment reporting for several days. In the aftermath, researchers estimated that the lost data could have had a small but significant impact on economic output, emphasizing the importance of maintaining accurate and timely labor market information.

Employment data is collected through the Survey Information Program (SIP), which includes the Current Population Survey (CPS) and the Current Establishment Survey (CES). The BLS collects payroll information from employers across the country, which is then processed and analyzed to produce a range of indicators. Without adequate funding or support from Congress, agencies may struggle to maintain their operations, leading to delays or suspension of critical reports.

The SIP relies on employer cooperation, which can be difficult to obtain during periods of uncertainty or shutdown. Agencies have developed contingency plans to mitigate disruptions, including suspending non-essential activities and relying on pre-existing data.

For example, the BLS has implemented a “shutdown plan” that allows for the release of critical reports with minimal disruption. This plan relies on the agency’s ability to draw on pre-existing funding and resources, ensuring continuity in employment reporting even during periods of government shutdown.

Employment report blackouts have significant economic implications, influencing business decision-making and investor confidence. Without access to timely and accurate data, companies may struggle to adapt to changing labor market conditions, while investors may hesitate to make informed decisions about the economy.

Moreover, employment report blackouts can exacerbate existing biases in economic decision-making. For example, without accurate unemployment rates, policymakers may rely on incomplete or outdated information when designing policy interventions. This can lead to suboptimal choices that harm economic growth and perpetuate inequality.

To improve data reliability during government shutdowns, agencies should consider alternative reporting mechanisms or contingency plans. One potential solution is to establish a more robust funding mechanism for federal agencies, ensuring that critical services like employment reporting can continue uninterrupted.

Alternatively, agencies could explore the use of private sector data sources or other supplementary information to fill gaps in employment reporting. This approach would require significant investment and cooperation between public and private stakeholders but could ultimately enhance the accuracy and reliability of labor market data.

As policymakers consider how to strengthen the economy and promote economic growth, they should prioritize improvements in data collection and reporting. By investing in contingency plans, alternative reporting mechanisms, or more robust funding arrangements, federal agencies can mitigate disruptions during periods of shutdown and ensure that critical labor market information remains available when it is needed most.