Core Viewpoint - The U.S. government shutdown is creating a "blind" situation for policymakers at a critical moment for the economy, complicating the Federal Reserve's decision-making regarding interest rates due to a lack of updated economic data [1] Impact on Economic Data Collection - The government shutdown is significantly affecting the collection of key economic data, particularly the Consumer Price Index (CPI), which is crucial for the Federal Reserve's interest rate decisions [2] - The Bureau of Labor Statistics (BLS) has lost approximately one-third of the October price data due to the shutdown, which could lead to a decline in data quality over time [2][3] - Other economic indicators, such as the Personal Consumption Expenditures Price Index, will also be impacted, although some data sources like retail sales may be less affected [2] Historical Context - This shutdown marks the 15th federal government shutdown since 1981, with previous shutdowns causing delays in important economic reports [4] - Historical examples include the 1995-1996 shutdown, which delayed the employment report by two weeks, and the 2013 shutdown, which also caused significant delays in various economic data releases [5] Alternative Data Sources - In the absence of government data, private sector economic data is becoming increasingly important as a supplement [6] - Private institutions like ADP Research and Indeed provide alternative employment and job vacancy data, while financial institutions like Carlyle Group and Bank of America offer labor market updates [6][7] - Although these private indicators cannot fully replace the authority of official reports, they can help fill the data void and provide decision-making references for market participants [7] Federal Reserve's Decision-Making Challenges - The Federal Reserve is facing challenges in making interest rate decisions due to a slowdown in the labor market and inflationary pressures from tariffs [8] - The upcoming CPI report is critical for policy decisions, but the risk of further delays due to the shutdown complicates the situation [8] - The Fed is also considering alternative indicators from the private sector and local governments to inform their decisions, but the overall decrease in data availability is expected to increase the difficulty of their work [8]

Group 1 - Senator Elizabeth Warren is urging the Trump administration to release the September employment report, which is crucial for economic data, especially given the Federal Reserve's concerns about a weak job market and rising unemployment rates [1][2] - The Bureau of Labor Statistics (BLS) has reportedly completed the collection of labor data for September, and it is likely ready for release [1][2] - The White House has attributed the government shutdown to Democrats, claiming it creates an "information vacuum" that hinders decision-making for investors, economists, and Federal Reserve officials [2][3] Group 2 - The government shutdown is causing delays in the release of key economic data, including the BLS's non-farm payroll report and inflation reports, which are critical for economic assessments [1][3] - The Bureau of Economic Analysis (BEA) has also been asked to suspend operations, affecting the scheduled release of trade data and GDP figures [3] - The shutdown may force investors and Federal Reserve officials to rely on alternative data sources, such as the ADP report, which indicated a surprising drop in private sector employment, suggesting ongoing weakness in the job market [4]

Core Insights - The government shutdown is expected to prevent the release of the monthly employment report on Friday, which is crucial for investors and the Federal Reserve's interest rate decisions [1] - The U.S. Department of Labor has an emergency plan stating that economic data will not be released as scheduled if the government is shut down [1] - A spokesperson from the Department of Labor confirmed that the report on weekly initial jobless claims, scheduled for Thursday, will also not be published [1]

Core Points - The risk of a government shutdown in the U.S. is increasing due to a stalemate between the two parties over spending issues, which could lead to a significant disruption in the release of key economic data [1][2] - If the government shuts down, major federal statistical agencies, including the Bureau of Labor Statistics (BLS), are expected to suspend operations, delaying critical reports such as employment data, CPI, PPI, and retail sales [1][3] - The Federal Reserve may find it challenging to assess economic conditions without the latest inflation and employment data, making it less likely to deviate from its previously established economic forecasts [1][4] Group 1 - The current fiscal year funding for the U.S. federal government will run out on September 30, and without congressional action, a government shutdown will begin on October 1 [2] - The political impasse is primarily due to irreconcilable differences between the two parties, with Republicans favoring a "clean" continuing resolution and Democrats seeking to reverse previous cuts to healthcare subsidies [2] - Unlike previous shutdowns, the debt ceiling is not a focal point in this situation, meaning there is no immediate risk of a technical default by the U.S. government [2] Group 2 - A government shutdown would create an "information vacuum" for the market, as the Labor Department and its agencies would likely close on October 1, affecting the release of key economic data [3][4] - Key reports that would be delayed include the employment report on October 4, CPI on October 15, PPI on October 16, and retail sales on October 16, along with the preliminary GDP for Q3 on October 30 [3] - Some data, such as industrial production reports from the Federal Reserve and private sector data, will not be affected by the shutdown [3] Group 3 - If the shutdown extends, the Federal Reserve will have limited access to top-tier official data, making it more likely to adhere to its September economic projections [4] - Historical data shows that government shutdowns can vary significantly in duration, impacting the timely release of economic data [4][5] - Even after the government reopens, statistical agencies may take considerable time to catch up on backlogged work, leading to further delays in data releases [5]

Group 1 - E.J. Antoni criticizes the quality of the monthly employment report, claiming fundamental flaws in its methods, models, and assumptions, and suggests pausing its release until issues are resolved [1] - Antoni argues that the monthly employment data is often exaggerated and can mislead decision-makers, questioning how businesses can plan when they lack accurate employment figures [1][2] - Following a weak employment report for July, which showed an increase of only 73,000 jobs against a market expectation of 115,000, Antoni called for the dismissal of the current BLS director, leading to her removal by Trump [2] Group 2 - The July employment report revealed a rise in the unemployment rate to 4.2%, with significant downward revisions to previous months' job additions, totaling a reduction of 258,000 jobs [2] - Trump expressed confidence in Antoni's ability to ensure the accuracy and honesty of employment data, indicating a shift in leadership at the BLS [2] - There are widespread concerns in the economic community that Trump's adjustments to the BLS leadership may further undermine trust in U.S. official economic data [3]

Group 1 - The nomination of EJ Antoni as the next director of the Bureau of Labor Statistics (BLS) has raised concerns due to his previous statements suggesting the suspension of monthly employment reports, citing reliability issues and overestimations [1][2] - The White House has indicated that despite Antoni's suggestion, the Trump administration plans to continue releasing monthly employment reports to maintain public trust in the data [1][2] - Recent monthly employment reports have shown weak job growth, with significant downward revisions to previous months' data, leading to the dismissal of the former BLS director by President Trump [1] Group 2 - The BLS has tracked monthly data revisions since 1979, with an average revision of 51,000 jobs since the introduction of new sampling methods in 2003; however, revisions for May and June this year were notably higher at 120,000 and 133,000 jobs respectively [2] - Economists are divided on the issue, with some advocating for improved data quality rather than halting the publication of monthly reports [2] - Challenges faced by the BLS include budget cuts, declining public trust, and a drop in survey response rates, which have fallen from 60% in early 2020 to below 43% [2]