The Economy Doesn’t Need Federal Jobs Data To Function

The government shutdown has thus far had no effect on 74 percent of federal spending, but it has led to the furloughing of more than 2,000 of the 2,321 employees working at the Bureau of Labor Statistics (BLS) and delayed the highly anticipated release of its monthly jobs report.

Published on the Friday of each month (except during government shutdowns), the BLS’ Employment Situation report details changes in the unemployment and labor force participation rates, the absolute level of total payroll nonfarm employment, and the average hourly wage and weekly hours worked in the previous month. These estimates are produced from monthly surveys of businesses, government agencies, and households administered by the BLS and the Census Bureau.

The delayed release of the BLS report has led to fearmongering about the economy’s ability to function. Leila Fadel, host of NPR’s Up First, said on Friday that “businesses and policymakers are flying blind” due to the postponed release of the September Employment Situation. In fairness to Fadel, the Joint Economic Committee released a statement that the government shutdown had “impacted the availability of some data used in the [Committee’s] Monthly Employment Update,” and that it would “incorporate data from the Employment Situation release…into the Monthly Employment Update once the Bureau of Labor Statistics resumes necessary operations.”

But even without the BLS report, the economy has not been “flying blind,” thanks in part to the myriad private sector sources of labor market data.

On Wednesday, ADP Research, in collaboration with the Stanford Digital Economy Lab, published its monthly National Employment Report (NER) and Pay Insights reports. ADP uses payroll data from more than 500,000 companies and over 26 million employees to provide a monthly measure of U.S. private sector employment and pay scales. The release of both reports found that private sector employment declined by 32,000 workers in September and “year-over-year pay growth for job-stayers was little changed in September at 4.5 percent.”

ADP Research’s estimates closely track those of the BLS. In August, the agency found that total seasonally adjusted private employment increased by 38,000 jobs while ADP Research that month reported that private employers added 54,000 jobs. Likewise, the July Employment Situation found that the private sector grew by 83,000 that month, while the July NER reported that it grew by 104,000 jobs. The June Employment Situation and June NER, meanwhile, had different results; the BLS reported the private sector grew by 74,000 jobs while ADP Research reported that it shrank by 33,000 jobs. Flash forward to its August Employment Situation, released September 5, and the BLS revised its June estimate of private sector employment to reflect a contraction of 27,000 jobs in June—roughly in line with ADP Research’s original estimate of 33,000 private sector jobs lost.

But ADP Research is not the only game in town. For its bimonthly Labor Market Indicators report, the Federal Reserve Bank of Chicago relies on real-time labor market data published by Indeed, Lightcast, Morning Consult, Bloomberg, and Google Trends as well as ADP. The report also uses initial and continuing unemployment insurance claims, which are collected and reported every week by state-level agencies. (The Chicago Fed combines this real-time data with monthly data from the Current Population Survey and Job Openings and Labor Turnover Survey to make its employment forecasts.)

For economists, business executives, and policymakers, it’s undoubtedly frustrating that the BLS was unable to publish its monthly employment situation. However, absent a government jobs report, reliable private sector data abound to guide political decision makers and business leaders, proving that the economy can function just fine without bureaucratic number crunchers.