Government Shutdown Triggers Data Crisis: US Inflation Numbers in Jeopardy

The Bureau of Labor Statistics was scheduled to report the October consumer price index on Thursday, yet the government's closure has not only delayed its release but also halted in-person data collection. It is increasingly likely the BLS will forgo issuing an October CPI report altogether. This development has added to the data fog surrounding the Federal Reserve, which is already grappling with a highly divided board. The prolonged government shutdown has also led to the delay of two monthly jobs reports, further exacerbating the uncertainty surrounding the US economy. According to economists, the absence of reliable data will make it challenging for the Federal Reserve to make informed decisions about interest rates. "The lack of data is creating a perfect storm for the Fed," said Diane Swonk, chief economist at Grant Thornton. "They need accurate information to make informed decisions, and without it, they're flying blind." The Federal Reserve is currently facing one of its most divided boards in recent memory, with some members advocating for a rate cut and others pushing for a hold. The uncertainty surrounding the economy and the lack of data will only add to the tension. "The data fog is making it difficult for the Fed to get a clear picture of the economy," said Mark Zandi, chief economist at Moody's Analytics. "This is a challenging time for the Fed, and they need all the information they can get." The Bureau of Labor Statistics typically collects data through in-person surveys and interviews. However, with the government shutdown, these efforts have been halted, leaving the BLS with limited options. "We're doing our best to collect data, but it's a challenging time," said a BLS spokesperson. "We're exploring alternative methods, but it's unclear if we'll be able to release an October CPI report." The Federal Reserve is scheduled to meet on November 19 to discuss interest rates. However, without reliable data, it's unclear how the Fed will approach the decision. "The Fed needs to be cautious and wait for more information before making any decisions," said Swonk. "They can't afford to make a mistake, especially in this uncertain environment." The prolonged government shutdown has already had significant implications for the US economy. The delay of jobs reports and the potential absence of the October CPI report will only add to the uncertainty. As the Federal Reserve navigates this challenging environment, it's clear that the data fog will continue to be a major obstacle.