Impacts of Government Shutdown: White House Warns October Jobs and Inflation Data Could Be Withheld

Key economic reports for October might not come out at all due to the government shutdown, according to a White House official. Press Secretary Karoline Leavitt highlighted that this could cause lasting damage to how the government collects essential data.

Leavitt stated, “The Democrats may have permanently damaged the Federal Statistical system. Critical reports like the Consumer Price Index (CPI) and jobs data could be lost.” These reports help policymakers at the Federal Reserve make informed decisions, leaving them without necessary insights during a crucial time.

The ongoing shutdown, stretching over six weeks, is the longest in history. Economists on Wall Street are particularly anxious about the release of key data. This includes statistics from the Bureau of Labor Statistics such as nonfarm payrolls and consumer spending. Initially, many expected the information would be delayed but still released. Leavitt’s comments, however, raised doubts.

“The shutdown has made it hard for economists, investors, and policymakers to access critical government data,” Leavitt noted. She also mentioned it could knock down fourth-quarter economic growth by as much as two percentage points. Earlier, Kevin Hassett from the National Economic Council estimated a drop of 1.5 percentage points in the current quarter’s GDP.

Despite these concerns, some economists believe the overall impact will be minimal. Goldman Sachs even increased its GDP forecast, projecting 3.7% growth for Q3 and a full-year estimate of 1.3%, marking an uptick of 0.3 points. They anticipate the shutdown will have limited effects on job data quality.

Citigroup economists suggested that the September nonfarm payrolls report might come out soon, possibly by the end of this week or early next week. However, the October report could take until early December to compile.

This scenario underscores the importance of accurate government data in guiding economic policy and public confidence. As the situation unfolds, it will be interesting to see how these developments impact both Wall Street and everyday Americans.

For those seeking further insights, the Bureau of Labor Statistics provides a wealth of information on U.S. employment and economic trends: BLS.

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