Government Shutdown Blinds Fed by Halting Key Economic Data

The ongoing government shutdown has left U.S. policymakers without critical data at a pivotal time for the economy. As Federal Reserve officials prepare for their late-October meeting to determine whether to continue cutting interest rates or pause, they’re facing the challenge of making that decision with limited fresh information.

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Several federal agencies that supply essential economic reports have paused most of their operations due to the funding lapse, including the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA). The release of the consumer price index (CPI), originally scheduled for October 15, has been postponed to October 24. Meanwhile, key reports like the monthly jobs and retail sales data have been delayed indefinitely.

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When the Fed convenes on October 28–29, it will be forced to rely on outdated figures, past trends, anecdotal evidence, and private-sector data to assess the economy’s trajectory. Without recent official numbers, determining whether inflation has stabilized and how quickly the labor market is cooling becomes significantly harder.

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The most concerning impact of the shutdown centers on the consumer price index, a vital measure the Fed uses to shape monetary policy. The BLS typically collects prices on roughly 80,000 goods and services each month, mostly through in-person visits conducted over three 10-day periods. According to Morgan Stanley economists, by October 10 the agency had already missed about one-third of its usual October data collection.

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Former BLS Commissioner Erica Groshen noted that while the agency can recover some of the lost data through overtime work or by using “imputation” a statistical method that estimates missing data the overall accuracy of the report will decline. Omair Sharif, president of Inflation Insights LLC, warned that the quality of data will start deteriorating immediately. “By the third week, you’re looking at either very poor-quality data or none at all,” he said.

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The shutdown also affects the personal consumption expenditures (PCE) price index, a key inflation metric published by the BEA that incorporates CPI data as an input.

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Other data disruptions are expected to be less severe. For instance, the BLS’s employment report relies on two surveys one targeting employers to estimate job growth, and another polling households to measure unemployment.

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Employer data should remain largely intact, but household surveys could face delays. During the 2013 shutdown, however, response rates stayed within normal ranges, suggesting minimal long-term damage.

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Retail sales data from the Census Bureau, which are largely submitted online or by mail, are considered mostly “immune” to the current shutdown, according to Morgan Stanley.

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This marks the 15th U.S. government shutdown since 1981, and several previous ones have disrupted the release of major economic reports.

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During the 21-day shutdown of 1995–1996, the December employment report was delayed two weeks, though officials said the disruption didn’t significantly affect the data’s accuracy. Similarly, the 2013 shutdown delayed both September and October jobs reports, along with trade, retail sales, and GDP updates.

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The 35-day shutdown that began in December 2018 the longest in U.S. history caused even greater disruptions. Key releases such as retail sales and GDP were postponed, while others, including trade and inventory data, were scrapped entirely. Fortunately, reports from the BLS, such as employment and CPI, continued since the agency had already secured its funding at the time.

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With federal statistics on hold, private firms are stepping in to provide alternative data. ADP Research releases monthly payroll estimates based on over 26 million employee records, while Indeed tracks job openings. Challenger, Gray & Christmas reports monthly job-cut figures, and Revelio Labs uses data from more than 100 million online profiles to estimate hiring trends.

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Wall Street institutions have also developed their own indicators. The Carlyle Group and Bank of America publish regular labor market updates, while Goldman Sachs estimates jobless claims using state-level data. Although helpful, these private indicators vary in methodology and coverage, making them imperfect substitutes for official reports.

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The Fed now faces the difficult task of weighing signs of a weakening labor market against the inflationary risks tied to tariffs. With fewer official numbers available, policymakers are increasingly turning to alternative sources.

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Fed Governor Christopher Waller recently pointed to reports from Carlyle and ADP, noting that Carlyle estimated just 17,000 new jobs in September. “These private reports aren’t as comprehensive as government data,” Waller said, “but they’re all showing the same thing the labor market is losing strength.”

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In a small relief for policymakers, the BLS announced on October 10 that it would still release the September CPI report before the Fed’s next meeting. However, the October report, due in November, may already be compromised by the ongoing shutdown.

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Fed Chair Jerome Powell acknowledged on October 14 that the situation could “become more challenging” if October data collection remains disrupted. Economists at the Royal Bank of Canada warned that this data blackout “will make a data-dependent Fed’s job increasingly difficult for the rest of 2025,” hindering efforts to understand how tariffs are influencing prices and employment trends.

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In short: With official economic data delayed, the Fed is being forced to steer policy using older figures and private-sector estimates an uneasy position as it navigates competing risks of inflation and slowing growth.

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