- President Trump signed legislation on Tuesday, ending the longest government shutdown in U.S. history.
- Key economic indicators to be released upon government reopening, although some may be skipped.
- FOMC members urge caution moving forward, increasing doubt of December rate cut.
On Thursday, President Donald Trump signed legislation to re-open the U.S. government after a 43-day shutdown, the longest in our nation’s history. The shutdown caused a real impact on the U.S. economy—the Congressional Budget Office projected that the shutdown would lower real Gross Domestic Product (GDP) growth in the current quarter by 1.5 percentage points, half of which could be recouped early next year should federal programs resume and government employees receive backpay. The shutdown halted food aid to millions of households, canceled thousands of flights, forced federal workers to go unpaid, and notably delayed the release of key economic data.
Due to the government shutdown, the release of nonfarm payrolls and unemployment, Consumer Price Index (CPI), Producer Price Index (PPI), and Personal Consumption Expenditures (PCE) inflation gauges, trade, and GDP figures have been delayed or skipped. Below is a full briefing on when the delayed figures should be expected:
Labor Market:
- The September employment report will be released in short order. It was originally set to be released on October 3, two days after the shutdown commenced, and the data was already collected and processed.
- October data will be impacted by the shutdown. These figures could possibly be skipped, as the survey was not collected. Bureau of Labor Statistics employees could potentially collect the data alongside the November data.
- November figures should be expected on the original release date, or within one week of it.
Inflation:
- The September CPI was already released.
- CPI data was not collected in the month of October. Roughly two-thirds of price data feeding into the CPI measure is collected by in-person visits to brick-and-mortar stores. In November, the collection process has been idle for nearly two weeks and risks collection issues as we approach a busy holiday season.
- PPI data was also not collected in October. The lack of CPI and PPI data will mean PCE data is also unavailable for the month of October, since most of the basket is constructed from CPI and PPI inputs.
GDP:
- The Q4 GDP report is not scheduled for release until Jan 30, 2026, but GDP estimates require a significant amount of input from other data sources, including retail sales, durable goods, and inflation reports. We could see the release delayed because of delays elsewhere in the data production process.
The Federal Open Market Committee (FOMC) committee members have been divided for months on the path of future monetary policy, and the lack of economic data has caused the disunity to snowball. A lack of conviction has created a schism amongst FOMC voters. Doves cite labor-market softness; however, they lack new evidence required to create a strong case for rate cut. Hawks point to steady consumer spending and signaled concern that businesses were preparing to pass along tariff-related price increases. The sentiment of a divided committee was reflected heavily in Powell’s press conference following the October FOMC meeting. Powell opened the door for optionality moving forward by stating that a rate cut at the December FOMC meeting is “far from” a foregone conclusion. “There were strongly differing views today, and the takeaway from that is that we haven’t made a decision about December, and we’re going to be looking at the data that we have, how that affects the outlook and the balance of risks,” Powell said.
Since Powell’s comments at the October meeting, odds of a rate cut at the December FOMC meeting have continuously diminished. Prior to the October meeting, the probability of a December rate cut was 92%. Today the market is pricing in a 51% chance of a December cut, nearly a coin flip. Recent Fed-speak has caused the market to hedge its bet on a December cut. Boston Federal Reserve President Susan Collins said she favored holding rates steady and that “it will likely be appropriate to keep policy rates at the current level for some time to balance the inflation and employment risks in this highly uncertain environment.” She sounded optimistic on the labor market and “absent evidence of a notable … deterioration,” stated she has “a relatively high bar for additional easing in the near term,” which “runs the risk of slowing … the return of inflation to target.”
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