The Labor Department should consider eliminating its evolving procedures for press “lockups” when it releases sensitive weekly data on unemployment claims because the steps are not well documented and the approach “creates an unfair competitive advantage for certain news organizations and their clients,” according to a new audit.
In recent years, the so-called lockups -- designed to allow reporters advance access to the embargoed data so that they can prepare a timely analysis -- have been refined by Labor, particularly after news organizations during 2012 congressional hearings complained about a ban on bringing electronic devices and software into the quarantined room at the Bureau of Labor Statistics to report the much-anticipated monthly jobs figures from BLS.
In August 2012, officials in Labor’s Employment and Training Administration accidently jumped the gun in releasing a set of state-compiled unemployment claim numbers a day early, prompting a probe from Labor’s inspector general. The FBI, according to news reports, is investigating whether some financial news services have obtained such data illegally to sell to clients for use in making investment decisions.
“Although ETA corrected control deficiencies identified after it released the claims report prematurely, we found the policies and procedures ETA followed to protect the claims report during the embargo were either not documented in writing or, when written, were not designed to minimize the risk of unauthorized use or disclosure,” the audit found.
Furthermore, it added, “even if news organizations adhere to the terms and conditions of the lock-up, their early access to the data positions them to potentially communicate this information to their clients, allowing them to trade on this data faster than the department can post the information to its website and faster than the general public can access it once the embargo is lifted.”
The IG noted that the Conference Board, a business group, recently ended such pre-release of data to the news media. It made six recommendations, among them that Labor “discontinue” use of the lockups. It also recommended that the assistant Labor secretary for employment and training consult with the Office of Management and Budget and other agencies to use press lockups to formalize a strategy for an “equitable release” of jobless claims data. It called on Labor to strengthen tools for the encryption of data and preservation of confidentiality.
Labor officials agreed with the recommendations.