When the federal government shuts down, the U.S. economy effectively flies blind. Without official data, employers, investors and policymakers are left navigating the labor market much like travelers relying on crumpled maps after a GPS collapse.
Key government data, including the Bureau of Labor Statistics’ monthly Employment Situation report, has gone dark during the shutdown. That leaves only limited private-sector indicators to provide a snapshot of the job market—and most point to slowing momentum.
Because the Federal Reserve operates on independent funding, its work continues. The Chicago Fed’s new real-time labor tracking system estimated that the unemployment rate reached 4.34% in September, up from 4.09% a year earlier, according to Reuters.
Private payroll processor ADP reported that companies cut 32,000 jobs last month, revising its August figures from an increase of 54,000 jobs to a 3,000-job decline, MarketWatch reported. “This is still a very stable market, but the hiring momentum has slowed,” said Nela Richardson, ADP’s chief economist. However, she cautioned that ADP data does not accurately predict the official BLS report.
Sector data also underscored a cooling labor climate. “The ISM Manufacturing PMI was little changed in September and pointed to a modest contraction of the industry,” Bill Adams, chief economist at Comerica Bank, wrote in a note to clients.
Smaller businesses are also struggling. Intuit estimated that firms with between one and nine employees cut 48,000 jobs in September—a decline of 0.37%—continuing a trend of job losses among small employers since early last year, according to Reuters. Employment among those companies averaged 400,000 fewer jobs in the third quarter than at its most recent peak of 13.1 million, a drop of 3%.
Meanwhile, layoffs continue at a historically elevated pace even as they slowed in September. Outplacement firm Challenger, Gray & Christmas said there were 54,064 announced job cuts last month, down 37% from August’s 85,979 and 26% below the 72,821 recorded a year earlier. However, year-to-date announcements total 946,426—the highest since 2020 and the fifth-highest in the past 36 years. Planned hiring has fallen sharply, with only 204,939 jobs announced so far this year, down 58% from 2024 and at the lowest September level since 2009.
ManpowerGroup’s data reflected similar trends. Becky Frankiewicz, the company’s president and chief strategy officer, said hiring had slowed to its weakest level since December 2022.
Until the BLS resumes reporting, the Federal Reserve will lack key employment and inflation metrics, including the Personal Consumption Expenditures data from the Bureau of Economic Analysis. Without those inputs, as Bloomberg and Reuters noted, central bankers may have little choice but to pause any new rate decisions while they wait for Washington’s numbers to come back online.
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