Every 10 years the U.S. government, by constitutional mandate, undertakes a census of the U.S. population and housing. The purpose is to gather data and information about the country and its residents, which will then be used in any number of functions, including: apportioning federal funds to local communities; calculating monthly unemployment, crime, and poverty rates; and publishing health and education data to aid policymakers and the public. A second crucially important goal is to redraw the district lines for the Congressional and State legislatures (as well as school and voting precincts)—something Republican strategists brilliantly and very successfully latched onto during the 2010 Census, enabling them to massively gerrymander Congressional seats, which were then set for the next decade. As Karl Rove once noted: “He who controls redistricting can control Congress.” In the very near term, however, the actual process of collecting and collating the data used in the census is no small undertaking; it requires the employment of hundreds of thousands of individuals, who are then let go once the process is complete. One major implication of this is that it wreaks havoc with the employment data, as depicted by the surge in government jobs every decade. With this week's employment report and the fact that the government is already starting to ramp up for the 2020 Census, for this week's Economics Weekly, we lay out what impact one should expect on the nonfarm payroll data over the coming 18 months or so.
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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.