U.S. Delays Changes to Economic-Data Lockups by at Least a Week

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The U.S. Labor Department postponed next week’s deadline for removing computers from the secure room where journalists get pre-release access to major economic reports.

The delay was in response to the concerns raised by a coalition of media organizations that the department’s proposal would limit the wide distribution of key economic data to the general public.

“To ensure readiness, we have decided that the department, the press and the public at large will be best served by delaying implementation of the lock-up change for a relatively short period,” Bureau of Labor Statistics Commissioner William Beach said in a letter to news media on Tuesday. The change, originally scheduled for March 1, will now take place “no sooner” than March 9, he wrote.

The Labor Department said last month it will ban 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. The agency reiterated the plans in a letter last week.

The new deadline means the change will now be scheduled for at least three days after the February U.S. employment report, which is among the most-important data worldwide for investors and the public.

“I am confident that BLS and the department can make the planned changes to the lock-up in a way that offers the public equitable and timely access to data while ensuring the highest levels of security,” Beach wrote Tuesday.

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 Labor restores the connections at release time. Other electronic devices such as smartphones were already prohibited.

Attorneys for the media organizations, including Bloomberg News, the Associated Press, Dow Jones & Co., Market News and Reuters, wrote Feb. 4 to Beach that banning computers would merely delay news organizations from filing their news stories. That would give an edge to sophisticated traders who could scrape government websites, find the relevant numbers in fractions of a second and execute trades before the data are shared with the public, according to the letter.

Chaos could well result from the delays of media filing stories, as Americans swamp government websites to get the reports first, the attorneys said, citing the failure of Department of Agriculture internet sites during the release of market-sensitive reports. The media organizations said the Labor Department failed to give public notice and get comments on the plan as required by the Administrative Procedure Act.

The attorneys, from the law firm Holland & Knight, sent a follow-up letter saying that the Labor Department’s website was unavailable for a period during the release of the employment report on Feb. 7, a failure that was mitigated by the news media’s ability to publish from the lockup.

Beach had originally 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.

In a letter last week, Beach said that removing computers would minimize the risk of “premature disclosure of the data.” He also wrote that the department has “devoted significant resources to introducing improved technologies that strengthen our infrastructure, processing and data release capacities.”

To contact the reporter on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Scott Lanman, Jeff Kearns

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