Capitol Report: Markets got ready for the latest U.S. inflation data and then waited, and waited and waited


It was a normal Friday morning on Wall Street. Notes from analysts about the trading day all said that one of the highlights would be release of the latest inflation reading for wholesalers and other early stages of the supply chain, giving investors an inkling of what price rises consumers may eventually face this year.

Traders got into their seats, turned on their screens and waited, and waited and waited. Nothing happened.

Cable-business television anchors, accustomed to reading the producer price index headlines live on-air, sat still for a few moments, and then made small talk to fill the dead-space. Pretty soon, their producers gave up and and told them to move on.

It wasn’t until 20 minutes later that the first details of the report tumbled into public view, thanks to Haver Analytics, a firm which takes the government data and transforms it into data charts beloved by economists. A spokesman for Haver said the BLS database system was still accepting and responding to network requests even though the data was not available on the website through a browser.

It wasn’t until 8:55 a.m. Eastern that the Bureau of Labor Statistics, which produces the report, posted “sorry for the delay in the PPI release folks” on its Twitter feed with the barest details of the report. Shortly afterwards, the data was available on the website.

So far, the government has been silent about the cause of the delay, saying only that an investigation is underway. Visitors to the BLS website were simply greeted with the message that the website was “busy.”

The March PPI index jumped 1% in March, twice the consensus expectation.

The snafu is the latest chapter in the strange tale of the publication of government economic indicators, the press who cover them, and the investors who love them.

For decades, reporters had access to the reports under a publication embargo in a secure room without communication tools until the release time, on the assumption that it would give the media time to understand and present the data in a way that would limit volatility if the market reacted only to piecemeal headlines.

But with the growing sophistication of the internet and high speed trading, the Labor Department became dissatisfied with this system and decided to end the practice of early media access.

The end of the so-called “lock-ups” for reporters has led to something of a technological arms-race with Wall Street and some in the media vying to be first to get the data from indicator websites. This means headlines created by artificial intelligence.

Randall Smith, chair of business journalism at the Missouri School of Journalism at the University of Missouri, criticized the Labor Department’s earlier decision to end lockups as “not a sign of a market-driven economy that is transparent.” He called on the new Biden administration to reverse course and allow reporters to have early access.

“Artificial intelligence doesn’t replace the ability of people to see trends that are not only important to markets but to the public,” Smith said.

If the delay was a problem of technology, it should be fixed. If it was a new policy of some sort, it needs to be challenged,” he added,

One disadvantage is that the thousands of banks, funds, investors and media around the world accessing the website fight to be first to “scrape” the data from the website which may mean some get an advantage in timing trades based on the data.

Yields on longer-term Treasury yields

moved higher after the producer price index was eventually published Friday morning, before retreating again.

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