In a tense and occasionally contentious conference call with reporters and Washington bureau chiefs Tuesday, officials from the Department of Labor laid out new security rules surrounding the release of the government’s monthly jobs report and other market-moving economic data.
The dispute has implications for just how quickly Wall Street will be able to get one of the most market-moving pieces of data, and raises the question of whether all market participants would continue to get the information at exactly the same instant.
In the era of high-speed trading on Wall Street, even milliseconds can make a difference for traders trying to react to market-moving news. Wire service editors complained to officials that the new rules will unfairly disadvantage them in the information race, resulting in uneven dissemination of the information that could increase market volatility.
Department of Labor spokesman Carl Fillichio said the new rules are designed to guard against the possibility that the data could leak out ahead of the official release time. “The integrity and the security of the data is paramount,” Fillichio said.
The new rules, which were reported by CNBC last week, make dramatic changes to the rules surrounding media “lockups” in advance of the public release of the jobs number. Under the old rules, reporters could use their own computers and media organizations maintained their own data lines into the lockup room to ensure the fastest possible transmission time.
Now, however, the Department of Labor says all reporters will be issued government computers and government internet connections. Media organizations have been told they must remove all of their own equipment and lines from the Department of Labor. The Department of Labor will even provide pens and paper, and reporters will not be able to bring any personal effects into the room.
In another change, all reporters and media organizations will have to re-submit applications for press credentials for the lockups, in what the Department of Labor described as a complete re-examination of exactly who will have early access to the information.
Fillichio said that in the past two years two reporters have been disciplined for violations of the existing embargo rules, but he did not say who those reporters are or what exactly they had done.
One questioner expressed concern that television reporters would have an unfair advantage, since they will be able to read the numbers on air at precisely 8:30, while print reporters would have to transmit their information to their bureaus and lose time in formatting and posting their stories.
In one particularly fraught exchange, Daniel Moss of Bloomberg News asked what specific problem the Department of Labor is trying to correct by imposing the new system. Fillichio responded that “now is the correct time to institute these changes.”
“Do I interpret your response, Carl, as meaning there’s no current problem?” Moss asked.
“I’m trying to prevent a problem, Daniel,” Fillichio responded.
“What is the problem you think, you imagine, this will prevent?” Moss pressed.
“I think we’re going to move on,” Fillichio said, directing the conference operator to move to the next questioner.
In another exchange, Washington Examiner Executive Editor Mark Tapscott asked if there would be any difference in the way the information is transmitted to the White House and to the Secretary of Labor in advance of publication.
Fillichio said officials will continue to get advance information as they have in the past. “The process for how the data is transmitted to the administration will not change,” he said.
The new security system will first go into place for the release of the July 6 release of the June jobs report.