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story.lead_photo.caption A Transportation Security Administration officer works Friday at a checkpoint at O’Hare airport in Chicago.

WASHINGTON -- The partial shutdown of the U.S. government has begun to make it harder to assess the health of the economy by delaying or distorting key reports on growth, spending and hiring.

Government data on home construction and retail sales, for example, won't be released next week because staff members who compile those reports have been furloughed. The retail sales report provides a snapshot of consumer spending, which fuels more than two-thirds of the economy.

In addition, the next report on the economy's overall growth, set for Jan. 30, won't be released if the shutdown remains in effect. Even if the government has fully reopened by then, federal workers won't likely have had enough time to produce the scheduled report on the nation's gross domestic product.

The shutdown is starting to strain the national aviation system, with unpaid security screeners staying home, air traffic controllers suing the government and safety inspectors off the job.

Facing double the usual number of absences among unpaid Transportation Security Administration screeners, Miami International Airport will close one of its concourses most of today, Sunday and Monday to make sure the agency can adequately staff the remaining security checkpoints.

"Our wait times have been normal and operations have been smooth so far, but the partial closure is being done in an abundance of caution," airport spokesman Greg Chin said Friday.

Other major airports surveyed by The Associated Press said they had no immediate plans to close terminals or take other measures.

"We are at normal operations. We are, though, very much monitoring checkpoints, and we're in close contact with the federal authorities and the airlines," said Cynthia Vega, a spokesman for Dallas-Fort Worth International Airport.

Meanwhile, the national union representing 10,000 air traffic controllers -- who are also working without pay during the shutdown, in its 21st day on Friday -- sued the government Friday, claiming they are illegally being denied pay.

And aviation-safety inspectors are still off the job, deemed not to be essential enough to keep working during the shutdown.

Not all agencies are closed. Congress approved funding last year for the Labor Department, so the government's next monthly jobs report will be released as scheduled on Feb. 1. But it's unclear how long the department will be able to issue jobs reports -- the most closely watched barometer of the economy -- after that.

Many economists increasingly see the shutdown, should it persist, as a drag on the economy. Michael Feroli of JPMorgan Chase & Co. has downgraded his forecast for growth in the first three months of 2019 because of the shutdown. He now expects the economy to grow at a 2 percent annual rate, down from his previous estimate of 2.25 percent.

The shutdown is costing the economy about $1.2 billion a week, according to Standard & Poor's. Some of that loss will be regained after federal workers eventually receive back pay for the time they missed. But many government contractors won't be made whole. And lost business -- such as scheduled hotel stays from trips to national parks that won't be taken -- may not be made up.

FED WORRIED

Federal Reserve officials are now stressing their flexibility on interest-rate increases, emphasizing that they will be patient and their policy "data dependent." By this, the Fed means that the government's latest readings on hiring, inflation and growth will factor heavily in its rate decisions. Yet much of that data will now be unavailable -- to the Fed or anyone else.

"For us, one of the biggest effects of the shutdown has been around data," Raphael Bostic, president of the Fed's Atlanta regional bank, said Wednesday. "We're worrying about that."

Even some reports that are released on schedule are likely to be distorted by the shutdown. For example, the January jobs report may show an artificially high unemployment rate and low employment figure. That's because up to 380,000 federal employees who aren't working or being paid during the shutdown -- but who will return to work afterward -- could be counted as unemployed for January.

If so, that would raise the unemployment rate by 0.2 percentage point, estimated Ben Herzon, an economist at Macroeconomic Advisers, a forecasting firm. And the monthly job count could decline by 380,000 if the shutdown continues through the end of January, Herzon said. That could push the monthly job figure into negative territory.

If all the federal workers eventually receive back pay, as occurred after previous shutdowns, then the January jobs report would later be revised to restore those 380,000 jobs, according to the Labor Department's Bureau of Labor Statistics.

Other economic reports have already been missed. They include a monthly report on factory orders that was scheduled for Monday. That report typically provides insights into how much U.S. companies are spending on large equipment.

Inflation data will also be affected: The consumer price index was released Friday morning as scheduled, because it was prepared by the Labor Department. But the Fed's preferred inflation gauge is published by the Commerce Department's Bureau of Economic Analysis, which is closed.

And because the Agriculture Department is closed, future reports on wholesale prices and import prices won't include farm-related data, the Bureau of Labor Statistics said Thursday.

Meanwhile, the Treasury Department this week restarted a program that had been sidelined, allowing hundreds of Internal Revenue Service clerks to collect paychecks as they process forms vital to the lending industry.

The IRS clerks, who are paid $13-$18 an hour, process 400,000 tax transcripts a week -- helping potential homebuyers verify their incomes and the $1.3 trillion mortgage banking industry earn millions of dollars in fees.

The hasty intervention to restore the IRS' income verification service by drawing on revenue from fees -- even as thousands of other federal employees across the country are going without their salaries -- has intensified questions about the Trump administration's unorthodox efforts to bring certain government functions back online.

Critics, including many former IRS officials, described the move as an act of favoritism to ease the burden on a powerful industry.

Some large corporations are jumping in to give a financial break to federal workers -- who are also their customers:

• Major banks including Bank of America Corp. and Wells Fargo & Co. are offering to waive fees or modify loans for affected workers. JPMorgan said Thursday that it has been automatically waiving or refunding monthly service and overdraft fees for government employees with checking or savings accounts since Dec. 24.

• U.S. Bancorp said Friday that it has created a new loan of up to $6,000 available to federal government employees who are customers of the bank.

• Toyota Motor Corp. is offering extensions on car loans and leases of as much as two months, calling it a "broad outreach" to furloughed workers but also contractors and suppliers and businesses directly affected by the shutdown.

• All the big U.S. phone service carriers are pitching in with payment options, including AT&T Inc., Sprint Corp. and T-Mobile US Inc. Verizon Communications Inc., the largest wireless carrier in the country, told affected customers that the company is "here for you," with options to keep their services running such as a "promise to pay" program that let them pay later.

On a lighter note, one company got creative and turned the shutdown into a business opportunity to give unpaid federal workers some love. Adam & Eve, a Hillsborough, N.C.-based seller of sex toys and erotica, is offering a special 50 percent discount for federal employees "just in time for Valentine's Day."

Information for this article was contributed by Christopher Rugaber and David Koenig of The Associated Press; by Lisa Rein and Jeff Stein of The Washington Post; and by Cecile Daurat of Bloomberg News.

A Section on 01/12/2019

Print Headline: Shutdown hits economic data; reports on GDP, spending, home building face delays

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