WASHINGTON (AP) — A Labor Department watchdog has recommended ending a practice that allows reporters to review a key unemployment report before it is made public.
Media "lockups" for weekly unemployment benefits are a problem because news outlets can feed the data to investment firms and financial exchanges immediately after the lockup ends, the Labor Department's Office of the Inspector General said in a report released Thursday.
Several news services use software to transmit the economic data to traders, who then profit because they have the data fractions of a second before other investors. The AP provides such data to the Nasdaq exchange, which then sells the data to its customers.
In its report, the Inspector General recommended adopting procedures that eliminate such competitive advantages or discontinuing the lockups entirely.
The report focused only on weekly applications for unemployment benefits. But it could mark the first effort to end all lockups, including the monthly jobs report. Journalists have had an advance look at a whole range of economic data issued regularly by the government since the mid-1980s.
The Labor and Commerce departments hold lockups in secure facilities to allow reporters 30 to 60 minutes to review complex data before public release.
When lockups begin, the room is secured. Internet and phone access are shut off. Reporters then receive the embargoed information. Officials turn the phone and Internet lines back on when the lockup ends and the data are officially released.
Reporters are prohibited from bringing cellphones and other devices into the lockups. And Labor requires reporters to stow all personal items — including their pens and calculators — in lockers outside the room. They also must pass through metal detectors before entering the room.