The US Government has shut down. Well, sort of. Some parts of the government are still functioning. The government employees providing the services that the Trump administration deems “essential”, i.e. military, police (ICE), TSA etc., will have to continue working without pay for the time being. They can count of receiving back-pay, once the shutdown ends.

Other departments will face the prospect of mass firings. The mastermind behind Trump’s systematic destruction of the US government, Russel Vought, Director of the Office of Management and Budget (OMB), has made it clear that the administration will use the shut-down as a pretext for firing thousands of US government worker permanently. Whether the courts will tolerate this is an open question.

One part of the US government that will be shut down is the Bureau if Labour Statistics (BLS). Trump has already fired the head of BLS, Erika McEntarfer, after the BLS published some statistics contradicting Trump’s lies about how beautiful the economy in the US is doing (see my blog “The Revenge of the Economists”). Trump nominated Erwin John Antoni III, an economist with a PhD from Northern Illinois University, to succeed her.  Most people have never heard of him before and his nomination was pulled once it became clear that there was no chance, he would be approved by the Senate.

By shutting down BLS completely as part of a general government shutdown, something he vociferously blames on the Democrats, prevents the data releases economists in the entire world depend on for their analyses. Without such data releases they are forced to try to wring some information from alternative sources.

My former father-in-law owned and operated a small woodworking shop in Minneapolis. He made wooden frames for upholstered furniture as well as barstools. He always claimed he could read the state of the economy by the proportion of orders he received for his two main product lines. If the economy was doing well, orders for furniture frames increased. If it was headed into a recession, orders for barstools went up.

Unfortunately, my former father-in-law has passed away and the woodworking shop has closed. One remarkably accurate indicator of the health of the economy is gone. But there are numerous other indicators of this type.

According to CNN, Gray’s Papaya Hot Dog Shop in
New York reports a massive increase in sales of its especially low-priced combos such as the “Recession Special”, two hotdogs and a tropical drink for $7.50,
or the even cheaper “Local Special”, one hotdog and
a drink for five bucks.

There are other such unofficial indicators. In tough times people buy less online, reducing the need for cardboard boxes. The US carboard box industry is currently in crisis. About 9% of domestic box production capacity is set to shut down, which is the steepest retraction for the industry since the 2008 financial crisis. The demand for freight services declines in tandem.

That box office receipts at movie theatres follow economic trends has long been known. If times are good, people go to the movies, if times are tough, that is one luxury they forego.

What these and all other non-traditional “indicators” have in common, is that they react in real time to the mood of the economy. The official statistics are always backward looking, In October we get the data for September, in November that for October etc. This is why navigating the economy has been compared to steering a supertanker by only looking in the review mirror.

Many of the non-traditional economic indicators are currently flashing red. There is a very good chance that the US economy is not as healthy as the official statistics (the review mirrors on the supertanker) seem to suggest. There is a good chance that the BLS data releases planned for later this week would confirm that in September economic growth, employment and inflation were not as good as originally thought.

Due to the shutdown, this data is now not published. Not having reliable data suits the Trump administration just fine. Their repeated lies about how successful they are at managing the economy with tax breaks for the rich, benefit cuts for the not so rich and tariffs on everybody will not be contradicted by their own official statistics.