What the Latest Lack of Economic Data Means for Long-Term Investors

Investing is a lot easier when you have data about what's going on in the economy. Right now, those data are partially missing.

The Bureau of Labor Statistics (BLS) announced on Dec. 8 that October's readout of producer price index (PPI) data has been canceled rather than delayed, joining other data sets, like that month's employment statistics, in the void. At the same time, some markets are obviously struggling to digest this lack of information. More than $1 trillion in market cap has vanished from crypto markets since early October, with Bitcoin (CRYPTO: BTC) falling sharply from its record highs.

So what does this mean for someone who's investing for the next 10 to 40 years?

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When the scoreboard goes dark, uncertainty gets repriced

Economic data like the missing jobs report and PPI readout usually anchor investors' expectations for growth, inflation, and interest rates moving forward.

Losing a month of those reports does not erase everything we know about the economy and how it's presently functioning, but it does remove a shared reference point, and that alone widens the range of plausible outcomes. Furthermore, over the long term, if the missing data are joined by other data points whose reporting is canceled or permanently delayed, it'll start to reduce investors' situational awareness of economic trends. That's far more dangerous than the current situation is.

The official explanation for the missing data is mundane. No economic survey work was done during the shutdown, so the data for October weren't harvested. Of course, skipping an entire month of statistics when households already feel squeezed, and when the economy is already in precarious condition, makes it very easy to imagine that the missing numbers were quite ugly.

But the data we still have are less dramatic. Private payroll data shows hiring slowing from 2024's pace, but not plunging, and consumer spending data suggests that most households are still spending slightly more than they were a year earlier.

In other words, what is being repriced in the stock and crypto markets right now is the uncertainty around jobs and inflation, not to mention tariff policies.

Build a portfolio that doesn't rely on perfect data

If you assume that government statistics will continue to be delayed, revised, fabricated, or otherwise politicized -- and in our current times, you should be assuming these things as part of your investment planning process -- it's risky to own a portfolio that only works when the headlines are calm. We can't count on calmness, but we can certainly count on bouts of disruption continuing to occur.

One reasonable response to this dynamic is to buy assets that are not tied to any government's willingness to publish flattering inflation data, such as Bitcoin. Because Bitcoin isn't a fiat currency, no agency can vote to create a bit more Bitcoin to make the statistics look better. And while it isn't yet proven as a hedge against inflation, that one characteristic means that it at least has a fighting chance of preserving its purchasing power over time, unlike with dollars.

The catch is that because Bitcoin is an imperfect hedge against short-term trouble, it can be really volatile even when there's no issue directly affecting it. Over the last three months, it dropped by roughly 19% from its peak even as inflation worries have not gone away.

Therefore, it is more realistic to treat Bitcoin as one element in a broader inflation and downturn hedging toolkit, and as part of a carefully and fully diversified portfolio, rather than as your entire financial plan. The wider toolkit can and should include companies with solid pricing power, real assets like real estate, inflation-protected bonds, and enough cash on hand that you won't be forced to sell at the worst possible moment to pay for your living expenses. The idea is to brace yourself against a roster of threats over the long term, because you know for a fact that at least some of the threats in question will occur, and some maybe even more than once.

The message is to stress-test your investing plan for the possibility that inflation will run higher than reported for several years, and for the possibility that formerly reliable government data will become increasingly less common and less accurate compared to before. Tilt your core holdings toward proven and productive assets, and add a measured exposure to scarce digital assets, specifically Bitcoin, if it fits your risk tolerance and time horizon.

You can't control whether October's economic reports ever appear, but you can control how robust your portfolio is if they eventually confirm that the turbulence was real.

Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.