Blog : Flying Blind

by Ed Zwirn on October 2nd, 2013

The flow of useful information is proving to be one immediate casualty of the government shutdown.

First on the list of missed reports was the Census Bureau's construction spending update for August, which had been due at 10 a.m. Oct. 1, and had been expected to show a slowdown from July's 0.6% rise.

The most important of the missed reports this week will be Friday's jobs report. Unless a political miracle happens before then, it will be anybody's guess whether September's unemployment rate moved from August's 7.3%, or for that matter whether job creation differed from August's 169,000.

This information gap means that investors looking to get a handle on the economy and the stock market are going to have to seek alternative sources of information. On the other hand, investors have been known to get rich from information gaps.

Fortunately, there are some sources of information not dependent upon government appropriations. Wednesday morning's ADP Employment Change release, usually used by many to predict the official report, showed an anemic 166,000 jobs added in September. Another report, usually issued one day before the official numbers, Challenger Job Cuts, comes out Thursday morning.

Many other sources of information, most of them free, are available, and would be worth checking out even when the government returns. The Federal Reserve Bank districts issue regular reports. Also, there is a trade group for everything, some 3,000 being registered in the U.S. alone, and many of them supply useful statistics.

Looking to get a handle on consumer sentiment? The Conference Board Consumer Confidence Index and the University of Michigan Consumer Sentiment Index will likely receive wide coverage. A look at retail sales trends will still be available courtesy of groups like the International Council of Shopping Centers and reports such as the Johnson Redbook Index.

Despite the availability of sources like these, there can be no doubt that at least some of the economic information that normally moves the stock market will be unavailable for a while. But, at the same time, there can be no doubt that this reduction of information flow makes the surviving information itself more valuable.

The upshot: The government's budget and debt problems will eventually resolve themselves. Don't take this as an optimistic prognosis, but there will be some sort of outcome to this foolish situation, however distasteful and harmful it may prove to be. In the meantime, investors able to ferret out information, whether from reports or contacts, will be in an even better position to beat out a market filled with other investors who are flying more blind than they usually do.