U.S. to change procedures for release of major economic data
(Bloomberg) -- The U.S. Labor Department said it will ban all electronics including computers from the room where journalists receive advance access to major economic reports such as employment and inflation figures, in an effort to ensure a level playing field.
Currently, the department hosts “lockups” in Washington for major reports lasting 30 to 60 minutes, where journalists receive the data in a secure room, write stories on computers disconnected from the internet, and transmit them when connections are restored at the release time. Other electronic devices were already prohibited.
Bureau of Labor Statistics Commissioner William Beach said in a letter Thursday that Labor agencies including BLS have raised concerns about data-security stemming from the lockups, and cited a 2014 report by the department’s inspector general saying several news organizations that participate are able to profit by providing the numbers to algorithmic traders in a format that provides them an advantage.
Lockups will continue and journalists will be able to ask questions of statistics officials before the release time, Beach wrote. Releases will continue to be posted on Labor websites and on Twitter, and journalists can leave the room to file stories once the embargo lifts, Beach wrote.
The change will take effect March 1, Beach said. It wasn’t immediately clear if the shift would also apply to Commerce Department reports such as gross domestic product and retail sales, which are also distributed through the Labor Department lockups.
Labor Department officials were asked on a conference call with journalists if the change was specifically aimed at Bloomberg News, which participates in the lockups and whose founder and majority owner, Michael Bloomberg, is running for the Democratic presidential nomination. They denied any political motivation.
Officials also said they have the capacity to handle large loads of web traffic for major data releases that previously would have been disseminated through multiple news outlets simultaneously.
Lockups, which are permitted but not required by government regulations, have been a mainstay for U.S. media for almost four decades. They have been designed to give reporters time to digest figures on market-moving data and make sure they are accurate before distributed to the public. Statistics agencies and central banks in the U.K. and Canada use similar lockup procedures.
Media organizations including Bloomberg News and Reuters have challenged prior changes to procedures. The shift could also spur an arms race among high-speed traders to get the numbers first and profit off the data, raising questions about fairness in multitrillion-dollar financial markets.
--With assistance from Vince Golle and Alex Tanzi