Economy·Economy flies blind without jobs data, unemployment claims during government shutdownBy Christopher RugaberBy Paul WisemanBy The Associated PressBy Christopher RugaberBy Paul WisemanBy The Associated Press The American flag over the Capitol is illuminated by the early morning light on the first day of a government shutdown, in Washington, Wednesday, Oct.
1, 2025. AP Photo/J.
Scott ApplewhiteThe government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty the direction of the U.S.
economy. The absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will ly be delayed.
A weekly report on the number of Americans seeking unemployment benefits — a xy for layoffs that is typically published on Thursdays — will also be postponed.
If the shutdown is short-d, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve.
The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August.
The Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly.
It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again.
“The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth.
“It would be very good to know if that slowdown was continuing, accelerating, or reversing.” The Fed cut its rate by a quarter-point earlier this month and signaled it was ly to do so twice more this year.
Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available. A key inflation report is scheduled for Oct.
15 and the government’s monthly retail sales report is slated for release the next day.
“We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month.
The economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up.
Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy ly expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period.
A key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate.
Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was jected to stay at a still-low 4.3%.
On Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month.
It’s a crucial indicator of the economy’s health and vides insights into how the Fed might adterest rates, which affects the cost of borrowing and influences how investors allocate their money.
So far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high. Many es also rely on government data to gauge how the economy is faring.
The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S.
consumers and can influence whether companies make plans to expand or shrink their operations and workforces. For the time being, the Fed, economists, and investors will ly focus more on private data.
On Wednesday, the payroll vider ADP issued its monthly employment data, which showed that es cut 32,000 jobs in September — a signal the economy is slowing.
Still, ADP chief economist Nela Richardson said her firm’s report “was not int to be a replacement” for government statistics.
The ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown.
“Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said.
The Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns.
It will continue to vide its monthly snapshots of industrial duction, which includes mining, manufacturing, and utility output. The next industrial duction report will be released Oct. 17.
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