Breaking overnight: The United Auto Workers, which represents 150,000 employees at the Big Three automakers, is striking at three plants in Michigan, Ohio and Missouri. The move will put pressure on President Joe Biden to intervene in the industry's contract negotiations and try to avert an economy-rattling work stoppage. A Bureau of Labor Statistics spokesperson told MM the agency won’t collect or publish data such as unemployment numbers in the event of a shutdown. The Bureau of Economic Analysis may face the same restrictions, if a 2021 shutdown contingency plan is any indication. This won't help: Government funding gridlock is threatening to deprive the Federal Reserve of key data sources at a critical time for the economy. Economists warn that the loss of information about the labor market and inflation could impact the Fed as it weighs how much further it needs to slow the economy to bring down prices. Former Fed research official David Wilcox, now with Bloomberg Economics and the Peterson Institute, told MM that it’s particularly unfortunate at the moment, “given the heightened risk of a recession getting underway in the next few months.” “It’s never a good time to fly blind,” said Nick Bunker, who heads economic research for job listings site Indeed. “It’s particularly bad when you’re trying to land.” Should the shutdown last more than a few weeks, economists predict the Fed could hold off on raising interest rates until it has a better idea of how the labor market is performing. The uncertainty threatens to spook investors. “Several officials and leaders at the Fed have indicated that they’re really data-dependent right now in determining what interest rate decisions to make in the months ahead,” said Andrew Lautz, senior policy analyst at the Bipartisan Policy Center. “Not having this data available on time and at their fingertips — it does have a negative impact.” A (somewhat) mitigating factor is that Fed officials have started relying more on data from private sources. “One thing that did happen during the pandemic was that there was innovation in tracking the economy,” former St. Louis Fed President James Bullard told our Sam Sutton. “Wall Street, but also the Fed, invested in more timely information. … I think it's something that can be managed." Remembering a dark day — It’s been 15 years since Lehman Brothers filed for bankruptcy. Our colleague Victoria Guida reports in POLITICO Nightly that Washington is still fighting over how to respond. As always, send tips: Zach Warmbrodt, Sam Sutton.
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