"While the standoff shows no immediate sign of easing, investors and policy decision-makers are flying blind without federal data to help color their perceptions about the health of the economy. The Fed has already gone through one interest rate meeting without key data about its mandate: Maximum employment and a stable rate of inflation. Investors are also entering another month without significant barometers and may be turning to private surveys in a hunt for clues."
"Falling survey response rates and rising political polarization have conspired to reduce the reliability of survey-based evidence. Unfortunately, the frequency of surveys already means that they get more attention than they deserve. Frequency bias means we automatically pay attention to less-of-important things that are paraded before us more often. Remove alternative U.S. data sources, and there is a temptation to say: 'Well, we'll use this inaccurate number because there are no accurate numbers available.'"
A prolonged U.S. government shutdown is halting federal economic data releases, leaving investors and policymakers without key measures of employment and inflation. The Fed already held a rate meeting without access to its core mandate data. Market participants face a dearth of official barometers, prompting increased use of private surveys such as ISM manufacturing and ADP private payrolls. Analysts warn that private surveys suffer falling response rates, political polarization, and frequency bias, reducing their reliability. There is a risk that private survey results will be given undue credibility and drive decisions in the absence of accurate government statistics.
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