"The collection and release of nearly all federal economic data is postponed until after the government shutdown ends. The potential impact of the shutdown on the quality and availability of the October employment report and CPI depends on what data can be collected retroactively," Walker wrote in a note to clients."
"The shutdown appears most problematic for the quality of the CPI. While the use of alternative data means that prices can be collected retroactively for series that make up 10-20% of the basket, the vast majority of CPI price quotes are collected by hand and are collected roughly evenly across the calendar month," he said."
U.S. financial markets have moved toward risk-on behavior even as a government shutdown suspends the collection and release of most federal economic data. S&P 500 futures are marginally higher with the index near its all-time high, and European and Asian markets are flat or up. Gold plunged 5.3% in its largest one-day drop in five years despite a 55% year-to-date gain. The Bureau of Labor Statistics likely cannot gather October employment and CPI inputs, forcing choices among retroactive collection, estimation, or leaving gaps, with CPI price quotes especially vulnerable because most are hand-collected.
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