The Federal Reserve faces an unprecedented challenge as it prepares to set interest rates next week—making its decision with almost no economic data available.
The government shutdown has halted the release of most U.S. economic statistics, including the monthly jobs report. However, the Fed also recently lost access to one of its main private sources of backup data.
“The Fed could overtighten or under-tighten,” Groshen said. “Those actions are often taken too little and too late, but with less information, they’d be even more likely to be taken too little too late.”
Powell has since asked ADP to restore the arrangement, according to The American Prospect.
Representatives at ADP did not respond to Fortune’s request for comment. The Fed declined to comment.
Groshen said there are several plausible reasons why ADP might have pulled the plug. One possibility, she said, is that the company found a methodological issue in its data and wanted to fix it before continuing to share information used in monetary policy.
“That would actually be a responsible decision,” she told Fortune, noting that private firms have more flexibility than federal agencies but less institutional obligation to be transparent about errors.
Another explanation, Groshen said, could be internal or reputational pressure. After Waller mentioned the collaboration publicly, ADP may have worried about how it looked to clients or shareholders.
“You could imagine investors saying, ‘Why are we giving this away for free? The Fed has money,’” she said. The company might also have wanted to avoid being seen as influencing central-bank decisions, especially in a politically charged environment.
Whatever the motivation, Groshen said the episode underscores how fragile public-private data relationships remain. Without clear frameworks or long-term agreements, companies can withdraw at any time.
“If policymakers build systems around data that can vanish overnight,” she said, “that’s a real vulnerability for economic governance.”
The timing could hardly be worse.
In the absence of real-time data, Fed economists are relying on a patchwork of alternatives: state unemployment filings, regional bank surveys, and anecdotal reports from business contacts. Groshen called those “useful but incomplete,” adding that the lack of consistent statistical baselines makes monetary policy far more error-prone.
She advocated for the BLS to receive “multiyear funding” from Congress so that it could stay open even during government shutdowns.
“I hope that one silver lining to all these difficulties will be a realization on the part of all the stakeholders, including Congress and the public, that our statistical system is essential infrastructure that needs some loving care at the moment,” Groshen said.
