By Rick Manning
The official federal government report on the nation’s Employment Situation didn’t happen on Friday, and nobody seemed to miss it.
Economists and others referenced a payroll report released by the paycheck processing company ADP earlier in the week that showed that the private sector had grown by 166,000 jobs.
The Gallup Company found that the unemployment rate on Oct. 3 was 7.7 percent (without seasonal adjustments.) Unlike the government unemployment rate which is also determined by a survey of American households that is completed sometime in the third week of the month, the Gallup poll provides a moving unemployment rate average reflecting in real time what is happening in the employment market, rather than a two week old snapshot.
These private sector employment reports are not as robust as the government report, but based upon the market’s reaction to a day without official government labor data (hint, the stock market went up), it is hard to discern the universal mourning for the “official numbers” short-term demise.
It is enough to make a reasonable person wonder why the government spends taxpayer money to produce and release these reports at all.
This question becomes all the more acute when you realize that the Labor Department has to engage in an elaborate spy versus spy game with reporters who are granted special access in advance of the release of economic data.
Most don’t realize that reporters receive the data one half hour prior to the public release of the data so they can digest and pre-write their stories. But not every reporter gets this access, only those with special press passes are able to enter the “lock-up” room and get the data in advance.
They write their reports on specially configured computers in an attempt to stop the pre-release of the data, as information released even a second early will trigger massive computer trading programs to go into motion generating millions of dollars in profitable trading.
Every government agency that releases market moving information faces this same problem with even the Federal Reserve subject to leaks. In fact, the Fed’s Sept. 18 decision to delay any QE3 tapering data was allegedly leaked about a second early, giving some investors an advantage in making money from the decision.
Ultimately two questions arise from the economic data release events over the past month.
Why does the government even compile some of these reports like the unemployment rate, when the private sector can do the same job in competition with other providers, saving the public money and providing even more reliable results?
The second is why does the government persists in providing certain reporters who they know cannot be entrusted with the information even a second early, access to the data?
It would seem responsible for the government to just release the data through their websites and every other communications tool at their disposal at a time certain with no handouts provided prior to the release. Officials could be available immediately upon the data release to provide context and answer questions, but the absurdity of locking reporters in a room painted to stop electronic communications from entering or exiting, with computer kill switches on the wall would be ended.
What’s more, every interested reporter, not just those with special access to the “room” would be able to have equal access to the information.
Fewer reports along with more efficient and fair information dissemination, without the so-called shutdown, perhaps we would never have even considered these ideas. Now that we know that the Labor Department’s “Employment Situation” is hardly missed, the only question that remains is why we can’t just do without it in the future and save a few coins in the process.
Rick Manning (@rmanning957) is the Vice President of Public Policy & Communications for Americans for Limited Government.
