Sunday, January 21, 2018

Data and the #TrumpShutdown

by Calculated Risk on 1/21/2018 12:11:00 PM

If the shutdown doesn't end quickly, several agencies will probably not release regular government reports. For the coming week, the December new home sales, the durable goods, and advance Q4 GDP reports will probably be delayed.

If the shutdown continues, the following week the January employment report will be delayed (fortunately the data has already been gathered).

Private data - like the existing home sales report this week - will still be released. All Federal Reserve data will continue to be released (separate funding).

Also, the DOL will continue to process unemployment claims and release the weekly initial unemployment claims report.

If the shutdown lasts through this week, we should a spike in claims in the report released the following week.

The following graph shows the 4-week moving average of weekly claims since January 2000 with various event driven spikes labeled.

Click on graph for larger image.

Note the spike related to the 2013 government shutdown. Weekly claims jumped 66,000 in the week following the shutdown in 2013. We will probably see a similar spike in the report released the week of January 28th (if the shutdown does not end quickly).

Another impact from the shutdown will be on mortgage lending.

In 2013, the IRS stopped processing 4506-T forms (the required two years of tax returns for mortgage lending). For loans ready to close, this will not be a problem. And lenders can still accept applications, but this could slow closings a few weeks depending on the duration of the shutdown.

There are many other impacts from the shutdown, and hopefully it will be resolved soon.