US gov't shutdown cripples data feeds for financial market

0 Comment(s)Print E-mail Xinhua, January 9, 2019
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The prolonged partial shutdown of U.S. federal government is cutting off updates of multiple macroeconomic indicators and posing a threat to normal dynamics of the financial markets.

Bureau of Economic Analysis under the Ministry of Commerce is not updating monthly report on international trade for November 2018 scheduled on Tuesday.

"Due to a lapse in Congressional Appropriations for fiscal year 2019, the U.S. Bureau of Economic Analysis is closed. This website is not being updated until further notice," reads a notice on the website of the bureau.

Bureau of Economic Analysis is responsible to generate macroeconomic and industrial data including gross domestic product (GDP), personal income and outlays, state personal income, international transactions, international trade and others, which are key to assess national macroeconomic operation.

Decision makers like Federal Reserve, economists, investors, media outlets and financial markets rely heavily on regular data feeds from federal government.

U.S. Census Bureau affiliated with the Ministry of Commerce didn't provide the latest monthly data on manufacturers' shipment, inventories and orders for November 2018 as scheduled on Monday.

U.S. Census Bureau posts a similar notice on its website blaming its malfunction to lapse of federal funding.

Moreover, the U.S. Securities and Exchange Commission, one of U.S. financial market watchdogs, is not responding to any non-emergency questions, fillings and proceedings with the Division of Investment Management and the Division of Corporate Finance hit hard particularly.

National Agricultural Statistics Service and Office of the Chief Economist-World Agricultural Outlook Board under U.S. Department of Agriculture has suspended their work since Dec. 22, 2018. Reports on crop production, world agricultural supply and demand estimate, stocks of grain and rice, winter wheat and canola seedings, cotton ginnings and others will not be issued on Jan. 11, 2019, said a notice by the department on Jan. 4.

"The suspension of economic data has impacts on markets for sure and attention should be paid to further developments of the issue and real effects as the issuance of mostly important data on non-farm payrolls, consumer price index, producer price index, durable goods and new home sales is normal as of now," said Liu Zhidan, senior vice president and head of treasury department of Bank of China's New York Branch on Tuesday.

Liu said market players' judgment of U.S. economic performance definitely would be affected with issuance of more economic data to be suspended in prolonged shutdown.

"Without economic data, investors are like blind people trying to learn and conceptualize what the elephant is like by touching it," said Liu.

Meanwhile, agencies like U.S. Energy Information Administration issued separate notices stressing ready appropriations for fiscal year 2019 and continuous publication and data collection as scheduled.

The shutdown of federal government could affect the Federal Reserves' interest rate decision and would significantly impair economic forecasters' ability to gauge growth due to delay of data issuance, according to economists with Deutsche Bank.

Current partial shutdown of federal government made weakness in the market worse than it might have been due to the liquidity impact of less federal spending, according to Alan Longbon, an investment analyst and blogger with Seeking Alpha.

U.S. GDP growth would come down by 0.1 percent to 0.2 percent for every week of governmental shutdown, according to JP Morgan Chase.

U.S. federal government has been marred in partial shutdown since Dec. 22 as a result of an impasse between the White House and Congress over whether to provide billions of dollars for a border wall between the United States and Mexico.

The ongoing shutdown of federal government, the third longest one so far in U.S. history, has hundreds of thousands of federal employees unpaid. It could turn out to be the longest one by Jan. 12. 


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