The Warning

Key economic reports for October may never see the light of day. White House press secretary Karoline Leavitt told reporters Wednesday that the government shutdown could cause permanent damage to federal data collection.

"The Democrats may have permanently damaged the Federal Statistical system with October CPI and jobs reports likely never being released," Leavitt said. "All of that economic data will be permanently impaired, leaving our policymakers at the Fed flying blind at a critical period."

The shutdown dragged on for more than six weeks - the longest in history - putting critical economic data at risk.

What's At Stake

The most important missing releases are the monthly jobs report and consumer price index, both from the Labor Department's Bureau of Labor Statistics. Other impacted data includes retail sales, import and export figures, plus consumer spending and income.

Most Wall Street economists expected delayed releases. Leavitt's comments suggest the data may be gone forever.

"The Democrat shutdown made it extraordinarily difficult for economists, investors and policymakers at the Federal Reserve to receive critical government data," Leavitt said.

The Economic Impact

Leavitt said the shutdown could lower fourth-quarter GDP growth by up to 2 percentage points. Earlier Wednesday, Kevin Hassett, director of the National Economic Council, estimated the impact at 1.5 percentage points.

"For sure, it's going to have an impact on this quarter," Hassett said at the Economic Club of Washington.

Most economists expect minimal impact though. Goldman Sachs actually raised its GDP estimates, boosting Q3 outlook slightly to 3.7% and lifting its full-year forecast to 1.3%.

The Data Collection Problem

The shutdown lasted long enough to close agencies during what would have been their October collection periods. That's different from past shutdowns that mostly just delayed release of already-collected data.

Jeffrey Roach, chief economist at LPL Financial, said jobs data should be recoverable because it involves asking businesses for hard numbers. The BLS could likely collect multiple months of data in one period if needed.

But household survey data is harder. "It's just the more nuanced qualitative surveys that cannot be replicated," Roach said. "The water has gone under that bridge already."

Asking people about their willingness to work during a period that's already passed doesn't produce reliable data.

Wall Street's View

Citigroup economists speculated Wednesday that September's jobs report could be released as early as Friday but more likely early next week. They estimated October's count could take until early December.

Goldman's economists expect "limited impact" on jobs data quality from the shutdown.

The Bottom Line

The six-week shutdown may have permanently erased October's jobs and inflation data by keeping agencies closed during collection periods, leaving a hole in economic statistics that could hamper Fed decision-making. While Wall Street expects most data can be recovered with delays, the White House is warning some critical October reports may be lost forever.