Immigration Restrictions are 'Red Herring' for Unemployment, Says Dutta

Renaissance Macro's Chairman, Jeff deGraaf and Head of Economic Research, Neil Dutta discuss the path of markets and the overall US economy into 2026.

The Federal Reserve is no longer receiving data on private-sector employment from an independent provider, adding to policymakers’ lack of timely information on the economy amid the ongoing federal government shutdown.

Payroll services firm ADP Research stopped providing the data, which covers about 20% of the US private labor force, after an Aug. 28 speech by Fed Governor Christopher Waller that referenced the statistics, according to a person familiar with the situation.

It wasn’t immediately clear what triggered ADP’s decision. The spokesperson for the firm, which had been providing the data to the Fed for several years, didn’t respond to a request for comment.

The continued lack of access to the data, first reported by The American Prospect, comes at a difficult time for the Fed. Because of the government shutdown, federal statistical agencies have mostly ceased producing economic reports. That’s obscured policymakers’ understanding of economic developments as they approach their policy meeting set for Oct. 28-29.

Officials are expected to again lower interest rates at that gathering, but are facing a thorny policy outlook as they seek to balance signs of a weakening labor market with lingering inflation concerns.

The Fed relies on a mix of economic data from official government reports, third-party providers and its own measures to inform policy decisions. In a 2019 speech, Fed Chair Jerome Powell spoke about the central bank’s collaboration with ADP, saying it provided “an independent read on payroll employment that complements the official statistics.”

“While experience is still limited with the new measure, we find promising evidence that it can refine our real-time picture of job gains,” Powell said at the time. He said the Fed used the ADP data to construct its own measure of payroll employment, and that the statistics were available to the Fed from the ADP on a one-week delay.

Speaking during an event last week, Powell said private data “is better used as a supplement for the underlying governmental data, which is the gold standard.” He said if the federal shutdown goes on for a while, the Fed wou

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