ORLANDO, Florida, Nov 12 (Reuters) - The end of the

longest-ever U.S. government shutdown is in sight, which means

official economic data will soon be forthcoming. But even if

investors and the Federal Reserve are breathing a sigh of

relief, the signals they should soon get might not be all that

reliable.

Some of the delayed figures should begin to trickle out

quickly. Economists at Morgan Stanley predict the September

nonfarm payrolls report will probably be released a few days

after the shutdown ends, as the data has already been collected.

It will be much longer before the October report lands,

however, but when it does, it could be missing one key element:

the unemployment rate.

For the first time since 1948, the "household survey," from

which the unemployment rate is calculated, was not carried out

last month, according to Claudia Sahm, chief economist at New

Century Advisors. Unlike the "establishment survey" which

determines the monthly change in payroll jobs, subsequent

household surveys don't ask about prior months.

This data gap could factor into the U.S. central bank's

interest rate decision in December, as Fed Chair Jerome Powell

has made clear the labor market side of the central bank's dual

mandate has weighed more heavily on recent policy decisions than

inflation.

To be sure, what employment data the Fed does have to go on

is not painting a pretty picture. Based on private-sector data

and the limited government figures available, economists at

Goldman Sachs now reckon nonfarm payrolls declined by 50,000 in

October. That would be only the second monthly drop since

December 2020, and the biggest decline in more than five years.

A report last week from global outplacement firm Challenger,

Gray & Christmas showed planned layoffs soared to more than

150,000 in October, the highest reading for that month since

2003.

The Fed, however, may put its rate cuts on hold as long as

the official employment and other data remain incomplete and

potentially unreliable.

"What do you do if you're driving in the fog? You slow

down," Powell told reporters last month after the end of the

Fed's policy meeting.

INFLATION DISTORTION

The inflation and spending picture should remain hazy as

well.

Using the 2013 shutdown as a rough guideline, Morgan

Stanley's economists believe October inflation and consumer

spending data will not be released in time for the Fed's

December 9-10 policy meeting, never mind the November figures.

UBS economists are even more pessimistic about getting an

update on CPI inflation. They say the October report, originally

scheduled for Thursday, may not be released at all because the

Bureau of Labor Statistics was closed for the full month, so

price quotes were not collected.

Getting even deeper into the CPI weeds, UBS notes that

October data points are used as a base for some price index

calculations that affect other months. That means November,

December, and even April CPI inflation data could be distorted.

Meanwhile, there's a chance that October retail sales data

may also not be released before the Fed's next meeting.

According to UBS economists, retail sales data are collected by

mail, fax, or telephone, and aggregated within six business days

of the reference month. Was September's data collected?

"We could be without a key statistic for understanding a

large chunk of U.S. GDP for some time," they wrote on Friday.

Indeed, it's even possible that the unemployment and CPI

inflation rates for October are never released, because the data

were either partially collected or not collected at all.

So while the wave of relief lifting most stock markets this

week is understandable, the end of the shutdown should not be

confused with a return to economic clarity.

(The opinions expressed here are those of the author, a

columnist for Reuters)

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