WASHINGTON (AP) — The partial closure of federal operations beginning Wednesday has interrupted the release of critical economic indicators, depriving policymakers and financial markets of timely insights during a period of heightened economic uncertainty. n nAmong the most immediate consequences is the postponement of Friday’s monthly employment update, a closely watched gauge of labor market conditions. Additionally, the weekly count of initial jobless claims, typically issued each Thursday, will also be delayed. n nIf the disruption remains brief, the impact may be minimal. However, a prolonged halt in data dissemination could complicate monetary policy planning, particularly for the Federal Reserve. The central bank is currently weighing interest rate adjustments amid mixed signals: inflation continues to exceed its 2% objective, while hiring has sharply decelerated, contributing to a rise in the unemployment rate in August. n nThe Fed traditionally lowers borrowing costs when joblessness climbs, but maintains or raises rates when inflation pressures persist. With its next policy meeting scheduled for October 28–29—when a rate reduction is widely anticipated—officials may proceed with limited fresh federal data to guide their decision. n n”The labor market, once a pillar of economic resilience, has shown notable weakening over recent months,” said Michael Linden, senior policy fellow at the Washington Center for Equitable Growth. “Understanding whether this trend is deepening or reversing would provide crucial context.” n nEarlier this month, the Fed reduced its benchmark rate by 0.25 percentage points and signaled expectations for two additional cuts before year-end. Officials emphasized their reliance on evolving labor and price data, which now face delays. n nKey upcoming reports include the Consumer Price Index, due October 15, and retail sales figures, set for release the following day. These metrics offer insight into consumer behavior and inflation dynamics. n n”We’re taking a meeting-by-meeting approach, guided by incoming data,” Federal Reserve Chair Jerome Powell stated recently. n nThe broader economic outlook has grown more ambiguous. Despite sluggish job creation, signs point to strengthening overall output. Consumer spending has increased, and the Federal Reserve Bank of Atlanta projects solid economic expansion during the third quarter, following robust growth in the second. n nA central question for policymakers is whether this momentum can rejuvenate employment. Economists surveyed by FactSet had predicted only 50,000 new jobs in September, with the jobless rate holding at 4.3%. n nFinancial markets rely heavily on the monthly jobs report, released on the first Friday of each month. It influences interest rate expectations, borrowing costs, and investment strategies. n nDespite the shutdown, investor sentiment remains stable. The S&P 500 edged higher Wednesday, reaching a record peak. n nPrivate-sector data may partially fill the void. On Wednesday, payroll processor ADP reported a loss of 32,000 jobs in September—suggesting economic softening. However, Nela Richardson, ADP’s chief economist, cautioned that their data does not reflect government employment, which could be significantly affected in a prolonged closure. n n”Combining private and public data sources offers a more complete picture of a complex economy,” she noted. n nThe Federal Reserve will continue operations independently, as it is self-funded through returns on its securities portfolio. Its industrial production report, covering manufacturing, mining, and utilities, remains on schedule for October 17. n
— News Original —nVital economic data, including Friday’s jobs report, cut off in government shutdownn nWASHINGTON (AP) — The government shutdown that began Wednesday will deprive policymakers and investors of economic data vital to their decision-making at a time of unusual uncertainty about the direction of the U.S. economy. n nThe absence will be felt almost immediately, as the government’s monthly jobs report scheduled for release Friday will likely be delayed. A weekly report on the number of Americans seeking unemployment benefits — a proxy for layoffs that is typically published on Thursdays — will also be postponed. n nREAD MORE: Supreme Court lets Lisa Cook remain as a Federal Reserve governor for now in unsigned order n nIf the shutdown is short-lived, it won’t be very disruptive. But if the release of economic data is delayed for several weeks or longer, it could pose challenges, particularly for the Federal Reserve. The Fed is grappling with where to set a key interest rate at a time of conflicting signals, with inflation running above its 2% target and hiring nearly ground to a halt, driving the unemployment rate higher in August. n nThe Fed typically cuts this rate when unemployment rises, but raises it — or at least leaves it unchanged — when inflation is rising too quickly. It’s possible the Fed will have little new federal economic data to analyze by its next meeting on Oct. 28-29, when it is widely expected to reduce its rate again. n n“The job market had been a source of real strength in the economy but has been slowing down considerably the past few months,” said Michael Linden, senior policy fellow at the left-leaning Washington Center for Equitable Growth. “It would be very good to know if that slowdown was continuing, accelerating, or reversing.” n nREAD MORE: Fed’s favored inflation gauge accelerated slightly in August, report shows n nThe Fed cut its rate by a quarter-point earlier this month and signaled it was likely to do so twice more this year. Fed officials said they would keep a close eye on how inflation and unemployment evolve, but that depends on the data being available. n nA key inflation report is scheduled for Oct. 15 and the government’s monthly retail sales report is slated for release the next day. n n“We’re in a meeting-by-meeting situation, and we’re going to be looking at the data,” Fed Chair Jerome Powell said during a news conference earlier this month. n nREAD MORE: What to know about the Fed’s rate cut and mortgage rates n nThe economic picture has recently gotten cloudier. Despite slower hiring, there are signs that overall economic growth may be picking up. Consumers have stepped up their shopping and the Federal Reserve Bank of Atlanta estimates the economy likely expanded at a healthy clip in the July-September quarter, after a large gain in the April-June period. n nA key question for the Fed is whether that growth can revive the job market, which this Friday’s report might have helped illustrate. Economists had forecast another month of weak hiring, with just 50,000 new positions added, according to a survey by FactSet. The unemployment rate was projected to stay at a still-low 4.3%. n nOn Wall Street, investors obsess over the monthly jobs reports, typically issued the first Friday of every month. It’s a crucial indicator of the economy’s health and provides insights into how the Fed might adjust interest rates, which affects the cost of borrowing and influences how investors allocate their money. n nWATCH: Chicago Fed president unpacks weak jobs report and what it says about the economy n nSo far, investors don’t seem fazed by the shutdown. The broad S&P 500 stock index rose slightly Wednesday to an all-time high. n nMany businesses also rely on government data to gauge how the economy is faring. The Commerce Department’s monthly report on retail sales, for example, is a comprehensive look at the health of U.S. consumers and can influence whether companies make plans to expand or shrink their operations and workforces. n nFor the time being, the Fed, economists, and investors will likely focus more on private data. n nOn Wednesday, the payroll provider ADP issued its monthly employment data, which showed that businesses cut 32,000 jobs in September — a signal the economy is slowing. Still, ADP chief economist Nela Richardson said her firm’s report “was not intended to be a replacement” for government statistics. n nThe ADP data does not capture what’s happening at government agencies, for example — an area of the economy that could be significantly affected by a lengthy shutdown. n n“Using a portfolio of private sector and government data gives you a better chance of capturing a very complicated economy in a complex world,” she said. n nThe Fed will remain open no matter how long the shutdown lasts, because it funds itself from earnings on the government bonds and other securities it owns. It will continue to provide its monthly snapshots of industrial production, which includes mining, manufacturing, and utility output. The next industrial production report will be released Oct. 17. n nFind more of our government shutdown coverage n nWATCH: Congressional leaders and White House refuse to compromise on first day of shutdown n nREAD MORE: What happens now that a government shutdown is underway n nWATCH: Jeffries says GOP uninterested in negotiating because ‘they apparently wanted’ a shutdown n nREAD MORE: Are Democrats or Republicans to blame for the looming government shutdown? Here’s what our poll found n nWATCH: Democrats’ demands are a ‘ransom note,’ GOP Rep. Haridopolos says n nA free press is a cornerstone of a healthy democracy. n nSupport trusted journalism and civil dialogue.