U.S. government economic data has long been the gold standard in economic information around the world, but it’s far from the only option out there. 

Private companies collect economic data from the swipes on your credit cards, the location of your smartphone, online restaurant reservations, and the myriad other ways you interact with the economy.

For example, Ray Sandza, chief strategy officer at a company called Homebase, knows if you are taking a lunch break right now. Seriously. 

“All of our data is anonymized, we never share details about people,” he said. “But yes.”

Homebase makes employee schedules and time-tracking software. Most of their customers are small businesses with hourly employees, like restaurants and coffee shops. 

So, as employees clock into work using Homebase’s software, it creates a real record of activity in those businesses. “Now, you start to aggregate that across 150,000 businesses,  you get a very accurate view, literally the up-to-the-minute level of economic activity on Main Street,” said Sandza. 

That type of high-frequency data is especially useful when employment is rising or falling rapidly. In 2020, when monthly reports from the Bureau of Labor Statistics weren’t timely enough to capture how fast the economy was changing, policymakers looked to high-frequency data to better understand the real-time economic implications of COVID-19. 

Greg Fleming, a business and economics librarian at the University of Chicago, said the Booth School of Business was one of the organizations that added a subscription to Homebase’s data during that time. 

However, as useful as private company data sources are, Fleming said they are not a substitute for the data resources provided by the federal government. 

“Data is expensive,” he said. For some databases, Fleming added that the University pays up to six figures. By contrast, federal government data is free and accessible to the public. 

But it’s also unique. “Anything coming out of the private sector is unlikely to have the transparency that BLS and Census surveys have in terms of methodology,” said Zane Mokhiber, the director of data management and analysis at the Economic Policy Institute. “There really isn't a measure, or a group of measures, that I know about that can replicate the information that we get from the BLS.”

A lot of private companies that publish data, like Homebase, only have insight into the businesses that use their software — data is kind of a by-product of their main business. 

That differs from federal statistical agencies like the BLS, which exist specifically to collect and publish data.

“The private sector just wouldn't jump to fill in the void if government data collection was stopped or potentially corrupted by political interference,” Mokhiber said. “There's just not a clear profit motive there.”

Think about surveys on rural populations, detailed breakdowns of workers by age, race, and sex. “Some of these government surveys, which are critical, would simply not be done if the government didn’t do them,” Mokhiber said.

There are areas where private companies can add to or fill gaps in U.S. government data. 

For example, Homebase has clients — and therefore worker databases — in three cities that the BLS pulled out of this year: Lincoln, Nebraska; Provo, Utah; and Buffalo, New York.

But as useful as that information may be, it won’t replace the information that we taxpayers have always relied on the federal government to provide.