How’s the US economy doing? Shutdown makes it harder to say
WASHINGTON — The partial shutdown of the U.S. government has begun to make it harder to assess the health of the economy by delaying or distorting key reports on growth, spending and hiring.
Government data on home construction and retail sales, for example, won’t be released next week because staffers who compile those reports have been furloughed. The retail sales report provides a snapshot of consumer spending, which fuels more than two-thirds of the economy. With Macy’s and Kohl’s having said Thursday that their holiday sales were weaker than expected, a broader gauge of retail spending would have provided important clarity.
In addition, the next report on the economy’s overall growth, set for Jan. 30, won’t be released if the shutdown remains in effect. Even if the government has fully reopened by then, federal workers won’t likely have had enough time to produce the scheduled report on the nation’s gross domestic product.
Not all agencies are closed. Congress approved funding last year for the Labor Department, so the government’s next monthly jobs report will be released as scheduled on Feb. 1. But it’s unclear how long the department will be able to issue jobs reports — the most closely watched barometer of the economy — after that.
Though the economy remains healthy in most respects, there are rising concerns that growth could slow or even stall in coming months. The trade war between the United States and China, which has helped depress global growth, is likely slowing business investment. The stimulus from the Trump administration’s tax cuts is expected to fade.
And borrowing costs have risen since the Federal Reserve raised short-term interest rates four times last year. Before rebounding this week, stock markets had plummeted roughly 16 percent from their peak Oct. 2.
Many economists increasingly see the shutdown, should it persist, as a drag on the economy. Michael Feroli of J.P. Morgan has downgraded his forecast for growth in the first three months of 2019 because of the shutdown. He now expects the economy to grow at a 2 percent annual rate, down from his estimate of 2.25 percent.
The shutdown is costing the economy about $1.2 billion a week, according to Standard & Poor’s. Some of that loss will be regained after federal workers return.