Dearth of economic data leaves Fed, investors flying blind

Updated at 4:43 p.m. ET

(MoneyWatch) Government workers are back on the job today, but it could be days -- or longer -- before federal agencies resume issuing vital economic releases postponed due to the shutdown.

Among the most important of these releases is the U.S. Labor Department's monthly employment report, which policymakers, economists and other forecasters rely on as a gauge of how the economy is doing. Issued the first Friday of every month by the agency's Bureau of Labor Statistics, the job numbers for September were postponed after most government staff were furloughed beginning Oct. 1.

The BLS late Thursday disclosed that it will release last month's job figures on Oct. 22.

Capital Economics, which like other research firms analyzes the steady stream of federal economic data on behalf of its clients, predicted that it will be weeks before the government catches up in publishing all of the reports that were postponed during the partial shutdown. Some reports due out in October also could be delayed until late November because the closure impaired the government's ability to collect data.

"They'll need a few days to get themselves sorted out," said Paul Dales, senior U.S. economist with Capital Economics. "Some of the releases may be ready to go, and it's just a matter of pressing a button. They should be pretty close with the employment report because it was scheduled to go out four days after the shutdown. We might see that next week, but some other things, like September consumer prices and retail sales, might take longer."

Such delays would be consistent with how long it took federal agencies to get back in the swing following government shutdowns in 1995 and 1996, according to the economics firm.

The gap in economic data might seem like little more than an inconvenience, but it has major implications both for investors and for the broader economy. Perhaps most important, it could affect monetary policy by setting back the Federal Reserve's timetable for scaling back its $85 billion-a-month bond buying program.

Before the shutdown, many analysts expected the central bank to announce a move to start "tapering" the purchases at its December meeting. But the drought in government data caused by the shutdown has deprived financial markets and Fed officials of critical economic information. That is one factor likely to push tapering back into the new year, and perhaps as late as mid-2014, some forecasters said.

Of course, modest economic growth, not the shutdown, is the main reason monetary policy is likely to remain loose for the foreseeable future. Interest rates on benchmark 10-year U.S. Treasury notes fell Thursday to their lowest level since early October, according to the Bloomberg news agency, a sign that bond investors expect the Fed to maintain the pace of stimulus.

That, in turn, reflects sluggish economic demand, which is discouraging businesses from hiring. Although the unemployment rate has gradually drifted down this year to 7.3 percent, from 7.9 percent in January, that is mostly because millions of Americans have stopped looking for work. The economy added only 169,000 jobs in August, according to an initial government estimate, short of private forecasts. Between June and August, non-farm payroll gains averaged 148,000, well below the 200,000 jobs a month needed to rapidly lower the jobless rate.

Most economists expect September job figures to be just as tepid. 

"[Labor] participation is still declining, growth is less than 2 percent and we don't know what's going to happen with the federal government next year," said Lindsey Piegza, chief economist with brokerage firm Sterne Agee, alluding to the risk of another fiscal standoff over extending the government's borrowing authority. "Growth is still in positive territory, but we're losing momentum rapidly."