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US investors are hunting for private jobs data after the Federal government shutdown blocked a crucial labour market report, compounding concerns about the reliability of official economic statistics in the Trump era.
The Bureau of Labor Statistics will not publish its monthly data as planned on Friday, leaving global markets — and the Federal Reserve — without a crucial signal about the US economy’s health.
The data gap comes at an important time when investors are trying to understand how quickly the US labour market is weakening and the Fed’s stance on more interest rate cuts, amid lingering concerns about inflation.
“It’s a wildly unusual time,” said Torsten Sløk, chief economist at Apollo Global Management. “Labour markets are weakening, but all other indicators remain strong . . . and now we are flying blind.”
This week’s government shutdown adds to the chaos at the BLS, where decades of funding cuts have hampered data collection and President Donald Trump recently fired the commissioner after the agency published a grim jobs report.
On Tuesday, Trump withdrew his pick for a new commissioner, EJ Antoni, amid concerns the nomination of a political ally could harm the agency’s independence.
The turmoil at America’s most important economic statistics agency has sent traders and economists racing to alternative data suppliers that can help them predict the Fed’s next move at rate-setting meetings this year.
Edward Al-Hussainy, a portfolio manager at Columbia Threadneedle, said: “In the absence of official data, what is the Fed leading on? That information will be very very important to the market.”
“The longer this shutdown goes on, the more important it becomes for the Fed to signal what data they are watching,” he added.
The Fed leans on other sources, including the so-called Beige Book, its own compilation of economic conditions collected via interviews and questionnaires, published eight times a year.
The latest Beige Book, from August, showed a subdued picture with “flat to declining” consumer spending, rising lay-offs and hesitancy to hire. The next book is published in October.
Private alternative data suppliers are gaining traction. Payroll-processing company ADP this week reported private employers shed 32,000 jobs in September, the largest decline in two-and-a-half years.
“ADP has been proven to be quite accurate with the hindsight and the benefits of revisions,” Al-Hussainy said. “ADP has been collaborating with the Fed to give them weekly numbers. The methodology is quite good and they’re getting feedback from the Fed.”
But economists warned ADP’s anonymised payroll data was not a match for the BLS.
“You can’t switch from the historical data and add the new alternative data on top,” said Nathan Thooft, chief investment officer at Manulife Investment Management. “You can’t look at the BLS data and compare it to ADP.”
Thooft noted markets were little moved after the grim ADP report this week.
Economists say a “stagnant” labour market is also contributing to the gloomy job numbers.
The BLS’s latest Jolts data — released this week just ahead of the federal shutdown — showed lay-offs remained near record lows and quits slid to the lowest rate since the start of the year.
The Jolts survey covers roughly 21,000 businesses, from mom-and-pop shops to Fortune 500 companies.
Although it showed unemployment remained just above 4 per cent, uncertainty around Trump’s tariff and immigration policies has contributed to a lack of job market churn that has concerned some economists.
Hunting for more clarity, investors are also poring over data from LinkedIn and Indeed.
LinkedIn’s hiring data tracks changes in member profiles and closely mirrors federal data, down to individual sectors, said Kory Kantenga, the social network’s head of economics. It also points to stagnation, but no obvious red flags, he said.
“We see hiring slowing gradually, but not a sharp slowdown,” Kantenga said. “The unemployment rate can tick up a bit because it’s harder for folks to find work, but we wouldn’t expect there suddenly to be mass lay-offs.”
Indeed’s daily job posting index tracks “help wanted” ads on one of the internet’s largest job boards, offering a nearly real-time look at which employers are hiring. It also points to stagnation.
After a shortlived rebound in August, Indeed’s job postings in September fell to their lowest levels since February 2021.
“The market may look calm on the surface, but beneath that is a lack of dynamism,” said Indeed Hiring Lab economist Allison Shrivastava.
“It’s not proceed with caution,” she added. “It’s try not to proceed with anything right now.”
