Inaccurate headline statistics are not just academic; they actively shape policy. The misleading Consumer Price Index (CPI), for example, is used to determine Social Security benefits, food assistance eligibility, and state-level minimum wages. This means policy decisions are based on a distorted view of economic reality, leading to ineffective outcomes.

The recent government shutdown will create a permanent void in crucial economic data for October. While statistics like payrolls might be collected retroactively, survey-based data such as the Consumer Price Index (CPI) and household unemployment figures are likely lost forever due to recall bias, creating a black hole in the historical record.

The absence of official government data during shutdowns creates a 'data void' that heightens economic anxiety. Economists and the public are forced to over-rely on anecdotal evidence, like conversations with Uber drivers, which makes the economy feel more volatile and difficult to assess accurately.

A key second-order risk of the government shutdown is the halt of incoming economic data. This data blackout impairs the Federal Reserve's ability to make informed monetary policy decisions, creating significant uncertainty for investors and the broader economy ahead of key meetings.

Due to budget and staffing cuts at the Bureau of Labor Statistics, more than 33% of the Consumer Price Index is now estimated rather than directly surveyed. This significant increase in imputation questions the reliability of a key metric for economic policy.

The most significant danger of a prolonged government shutdown is the disruption to federal statistics. This creates an "unsettling" lack of visibility for policymakers, potentially causing them to miss a critical economic downturn and delay a necessary response. The direct GDP impact is often recoverable later.

Shutdowns halt the release of key data like jobs reports and inflation figures. This obstructs the Federal Reserve's ability to make informed interest rate decisions, creating market uncertainty. It also delays Social Security COLA calculations, impacting millions of retirees who rely on that data.

The government's failure to release key economic reports (jobs, GDP, inflation) creates a dangerous information vacuum, forcing the Fed and businesses to operate without instruments. This void presents a significant business opportunity for private companies to develop and sell alternative economic data streams and forecasting models to fill the gap.

Critical economic data from household surveys, such as the monthly unemployment rate, will likely be lost forever for October due to the government shutdown. Unlike business data, household surveys cannot be conducted retroactively because of 'recall bias'—people simply cannot accurately remember their precise employment situation from weeks prior.