Jobs Day: No Jobs Report

Today would ordinarily be “Jobs Day,” the relase of the Bureau of Labor Statistics’ once a month Employment Situation Report which updates us with both the non-farm payrolls number (from the establishment survey) and the unemployment rate (from the household survey) except today there will be no release because the government is shut down.

This is a great example of the kind of insidious harm that a government shutdown can do. Even as a data junkie, you have to be honest that skipping one month’s jobs data isn’t a big deal. In fact, if the BLS got a 12-sided die and simply at random suppressed one out of every twelve jobs report then life would go on. But skipping two jobs reports in a row could be a real problem. Skipping three or four in a row risks very serious issues in the economy. The Federal Reserve and other officials rely on credible data to make macroeconomic stabilization policy. What’s more, private sector businesses rely on the fact that the Federal Reserve will have credible data to give them some background confidence in overall economic conditions. If we were flying blind all the time—and knew we were flying blind all the time—we’d have a much less table economy.

And one could say the same for the whole range of government data series. Take any one release—housing starts for March, chicken prices for August, etc.—and its impact is trivial. But in the aggregate this steady drip-drip-drip of credible statistical information is an important public good. If the government didn’t do it, private parties could try to fill the gap. But it’s a classic case of high fixed costs and low marginal costs, where private provision will lead to lots of deadweight loss.