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After a 43-day shutdown—the longest in U.S. history—the government is reopening, but the effects are far from over. Key economic reports on jobs, inflation and retail sales remain delayed, and in some cases may never be released, leaving policymakers and businesses to make decisions without a clear picture of the economy.��

The White House said Wednesday it was unlikely that key federal inflation and labor reports affected by the shutdown would be released, although September’s employment data, collected before the shutdown, is expected to come out soon. The added uncertainty comes as new tariffs on imported goods could push up prices on everything from toys and electronics to clothing heading into the holidays.

Edward Van Wesep

CU Boulder Today caught up with��Edward Van Wesep, professor and chair of the finance division at the��Leeds School of Business, to discuss��what the loss of economic data means for consumer confidence and spending as the holiday season ramps up and how uncertainty could linger even as federal operations resume.

Let’s start with the big picture: What is an “economic data blackout,” and what happens when it lifts?

The government normally collects key economic numbers—like jobs and prices—by surveying households, businesses and stores. A shutdown can pause these surveys, delaying official reports on employment and consumer prices. When we don’t have those numbers, either we’re in a complete blackout, or we try to use substitutes for the government data.��

Online data can help, but it only covers part of the market. Private estimates, like ADP payroll reports—which track wages for about 20% of U.S. workers—fill some of the gaps, but without government data, these estimates can drift from reality, especially in sectors like government work that are heavily affected by a shutdown.

Why should everyday consumers care that these reports were delayed?

If you’re deciding what to buy at the grocery store, it might not matter much. But economic forecasters and regulators, like the Fed, rely on these numbers to make decisions. Businesses use them to plan investments, production and hiring. When numbers are missing, uncertainty rises. Without current data, interest rates may not reflect real economic conditions, which can affect big-ticket purchases like cars and homes.

How do tariffs factor into that uncertainty?

Tariffs on low-end consumer goods are likely raising prices. A tariff is a tax on imports and all taxes get split between buyers and sellers based on something called elasticities of demand and supply. These describe how much people and companies cut back when they face cost increases. Foreign exporters of low-end consumer goods have very little space to absorb a tax, so U.S. consumers end up paying more. Companies selling these goods here, like Walmart and its suppliers, also have very little room to absorb tariffs, so consumers are likely to bear the burden.����

It’s not uniform, though. Powerful foreign exporters such as those making iPhones and semiconductors have space to absorb costs, as do U.S. sellers of these goods. Consumers probably won’t feel as much of a pinch for these goods. But the point is that we just don’t know how prices of any of these goods are changing because government statistical agencies aren’t releasing data. Proxies from private organizations help, but government data completes the picture.

With the government reopening, what does the broader picture look like for holiday spending?

It’s worth pointing out that aggregate consumer spending doesn’t ever fall dramatically, COVID-19 pandemic aside. Even in the great recession, spending dropped less than 2.5%. But small drops in aggregate mask large effects for people experiencing unemployment or financial stress, while most people go about their business. The labor market has been awful for over six months and in the first two quarters the economy was weak. We just don’t know how weak it has been since June. Those numbers haven’t been released. We have estimates, but they’re all over the place. It seems that the bottom 80% are suffering and the top earners are carrying the economy. That’s probably bad news for most retailers and companies serving the mass market.

Could continued uncertainty make consumers rely more on credit?

Consumers are already relying on credit. During the pandemic, personal savings spiked while credit card debt dropped. Now savings are lower and credit card debt is higher. People are already spending money that they don't have, which worries firms because if most of your customers are spending money they don’t have, at some point, they will probably stop.

Now that the shutdown is over, how should consumers and businesses think about the economy?

The economy right now is a mystery. It was a mystery even before the shutdown, given huge swings in imports and inventories surrounding the tariffs. Missing or delayed data makes it hard to know how labor markets, gross domestic product growth, and consumer spending are holding up now. Add in factors like tariffs, which may soon be (temporarily) banned by the Supreme Court, and it becomes even harder for businesses and consumers to gauge what’s really happening.

As the government starts coming back online, what’s the most important data to be watching?

I’ll compare ADP’s labor numbers to the government’s first post-shutdown report. I’ll also watch GDP, but more importantly its components: consumer spending, firm investment, and growth from sectors like data centers. Even if the headline GDP number looks strong if consumer spending is solid but labor markets weak, that’s a recipe for slower growth ahead. If a lot of GDP comes from data center construction, that’s confidence in a very narrow industry holding up the economy. Broader-based labor market and consumer strength would be a healthier sign.����