Reporters and analysts have asked me, as a former BLS commissioner, about the status of BLS functions during the shutdown, particularly the collection of data, the maintenance of the website, and the treatment of furloughed federal workers in the estimation of the unemployment rate. The following are commonly asked questions, and my responses to them:
Q: Will BLS be completely or partially closed during the shutdown?
A: BLS will be completely closed according to the Department of Labor shutdown contingency plan issued earlier this week. That means that no employees will be allowed to perform government work, that the scheduled reports will not be published, and that maintenance of the website will not be performed. Indeed, the BLS home page will stay unchanged from its content of 11:59 p.m., September 30, until the Bureau opens again.
Q: What will happen to the jobs data collected for September and scheduled for publication on Friday, October 3?
A: There will be no jobs report on Friday, should the shutdown last through Friday morning. Note that the September data from the Current Population Survey (CPS) (household survey) and the Current Employment Statistics (CES) (employment or jobs survey) have been completely collected and processed. The jobs report is likely written in final draft and could be released on Friday, should the agency reopen.
Usually, BLS staff present the final draft of the jobs report to the commissioner on Wednesday preceding the Friday publication. That enables the commissioner to brief key figures on Thursday afternoon, including the White House and other officials, like the chair of the Federal Reserve Board. That said, the White House this month will not know the jobs numbers if the shutdown continues through Friday morning. The president and his economic team only see the data the day before publication. So, if there is no publication on Friday, there is no peak at the data on Thursday.
Q: When will the jobs report for September be published?
A: First, all the data have been collected and processed. Thus, BLS might publish the jobs report as soon as it reopens. However, that unscheduled publication would require approval by the Office of Management and Budget (OMB) in the White House. OMB approves a publication schedule at the beginning of the year for all statistical reports designated as Principal Federal Economic Indicators. The jobs report is one of those reports. Any change in that schedule needs OMB approval. Here is a link to the BLS publication calendar.
Q: If BLS were open, would they count the furloughed federal workers as unemployed?
A: BLS treats furloughed workers as not working for pay and unemployed.
BLS asks this question about employment in the household survey (CPS): In the past four weeks, have you worked for pay or looked for work? Those who have not been paid for work or have not looked for work are not in the labor force and, thus, not counted as unemployed. For example, retirees are not in the labor force and not counted as unemployed. However, those who have not been working for pay but have searched for work are counted as unemployed and in the labor force.
Thus, a long shutdown that lasts more than four weeks could well cause BLS (again, if they are open for business) to count furloughed federal workers as unemployed. Many analysts assume that about 30 percent of the federal workforce will be furloughed during this shutdown. That percentage could well add about half a million people to the official unemployed population. That number could increase the unemployment rate by 0.3 percentage points, or from 4.3 to 4.6 percent.
Q: What about the reports due out on prices next week?
A: BLS produces three price index reports during the month: the Consumer Price Index (CPI), the Producer Price Index (PPI), and a report on the Import/Export Price Indexes (Ex-Im). Collection of data behind these reports takes place throughout the reporting month. Thus, all the September data have been collected. The CPI and PPI data primarily come from probability surveys, while the Ex-Im data are taken from daily trade data produced by the Commerce Department.
That said, it is doubtful that the collected data have been processed, and statistics based on the processed data produced. Thus, a shutdown continuing through the first week of October could well cause a delay or cancellation in the scheduled release dates for all the price reports. These reports are Principal Federal Economic Indicators, which means, again, that unscheduled publication of the reports would require OMB approval.
Q: If the shutdown lasts a long time (say, over 30 days), is the month when data are not collected just marked as a missing month or does BLS attempt to create price index values without relying on collected data?
A: BLS can publish interpolated estimates using “out of sample” data. That is, missing data for October might result in using September and November data to interpolate or create October statistics. This procedure is used when individual items in the CPI or PPI cannot be collected due to bad weather or other factors that prevent the collection of an adequate number of data points. However, we are in new territory for the interpolation of all items in one of the price indexes. BLS will work with OMB and other agencies to find a good solution, but we would be on statistical territory that BLS has rarely if ever traversed.
William W. Beach is the Executive Director of the Fiscal Lab on Capitol Hill
