A partial government shutdown has interrupted the release of vital economic indicators, creating a data gap just as signs point to weakening economic momentum, according to economists speaking to ABC News. n nThe U.S. Department of Labor delayed its monthly employment figures on Friday, depriving analysts of insights into a notable slowdown in hiring. Should the shutdown persist into the coming week, upcoming inflation statistics will also remain unpublished, obscuring how prices are evolving amid rising living expenses. n nJim Reid, a strategist at Deutsche Bank, described the situation in a client note as a “data vacuum.” n nThe lack of official statistics amplifies uncertainty during a fragile phase for the national economy, potentially undermining decisions made by households, firms, and government leaders, experts cautioned. There is also a risk that any economic harm caused by the shutdown might go unnoticed without timely metrics. n n”It increases risk and ambiguity at a particularly bad time,” said Mark Hamrick, senior economic analyst at Bankrate. “Right now, we’re all navigating through a fog.” n nAs of Monday, the shutdown entered its sixth day. The Senate failed to pass competing funding measures from both major political parties across four votes, most recently on Friday. n nLabor officials announced last week that several key reports, including the closely monitored jobs and inflation updates, would not be issued during the closure. Additionally, the Bureau of Economic Analysis and the Census Bureau confirmed they would suspend their scheduled data publications for the duration of the shutdown. n nThis data blackout coincides with a period of economic unease. Recent months have seen a significant decline in job creation alongside increasing inflation—conditions that align with what economists refer to as “stagflation.” n nThe slowdown in employment growth has sparked alarm, with some analysts warning of a looming downturn. August’s jobs report revealed a steep drop in hiring, continuing a weak trend in the labor sector. Later revisions indicated that job gains in 2024 and early 2025 were substantially lower than initially thought, intensifying concerns. n n”The labor market is the central worry for the U.S. economy,” Hamrick stated, noting that the hiring pullback implies a 40% chance of a recession within the next year—”a notably high level of risk.” n nWithout current government data, companies may delay major investments or hiring, while consumers could postpone large purchases, several analysts observed. n n”Generally, missing economic data makes the outlook less clear, prompting investors and executives to act more cautiously,” said Gregory Daco, chief economist at EY. n nThe Federal Reserve is scheduled to announce its next interest rate decision on October 29, following a Federal Open Market Committee meeting. If the shutdown continues, Fed policymakers may lack sufficient information to make well-informed choices, Hamrick noted. n n”It’s extremely difficult right now to gauge where inflation and growth are headed,” said Kenneth Rogoff, an economics professor at Harvard University. n nWhile private-sector data sources remain available, they are often seen as less reliable than official government figures. Thus, a pause in public reporting could prevent investors from recognizing potential economic improvements. n nHistorically, government shutdowns have caused limited economic damage, primarily due to temporary furloughs of federal employees, which reduce consumer spending. n nMark Zandi, chief economist at Moody’s Analytics, estimated that each week of a shutdown reduces annualized real GDP growth by about 0.1%. For context, the economy expanded at an average annualized pace of 1.6% in the first half of 2025, meaning it would take multiple weeks of disruption for significant harm to accumulate. n nHowever, without regular data flow, assessing the true economic cost of the shutdown becomes more challenging. n
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Government shutdown halts data, stokes risk as economy wobbles, experts say
The government shutdown halted the release of key economic data, choking off the flow of information as some experts warn the economy may be slipping toward a recession, some economists told ABC News. n nA federal agency postponed the release of a monthly jobs report on Friday, leaving observers in the dark about the status of a sharp hiring slowdown. If the government shutdown stretches into next week, fresh inflation figures will go unreported, masking price levels in the midst of rising costs. n nJim Reid, a research strategist at Deutsche Bank, in a memo to clients on Monday, lamented the “data vacuum.” n nThe absence of government data heightens uncertainty at a fraught moment for the U.S. economy, potentially hamstringing responses from consumers, businesses and policymakers, some economists told ABC News. The extent of possible shutdown-induced economic damage could also go undetected, they added. n n”It adds to risk and uncertainty at a most inopportune time,” Mark Hamrick, senior economic analyst at Bankrate, told ABC News. “Now we’re all essentially looking through a fog.” n nThe government shutdown entered its sixth day on Monday. The Senate has rejected dueling funding proposals from Democrats and Republicans in four separate votes, most recently on Friday. n nThe U.S. Department of Labor last week said some data would not be released during the shutdown, including closely watched monthly jobs and inflation reports. The Bureau of Economic Analysis and the Census Bureau — two important sources of additional data — also said they will pause scheduled releases for the duration of a shutdown. n nThe loss of data has arrived at an uneasy period for the economy. In recent months, the economy has suffered a sharp hiring slowdown alongside a rise in inflation, setting the conditions for what economists call “stagflation.” n nThe downshift in hiring has proven especially worrisome, stoking concern among some economists about a possible recession. n nA jobs report last month showed a sharp decrease in hiring in August, extending a lackluster period for the labor market. Meanwhile, a revision of previous hiring estimates days later revealed the U.S. economy added far fewer jobs in 2024 and early 2025 than previously estimated, deepening concern. n n”The job market is the primary area of concern for the U.S. economy,” Hamrick said, adding that the hiring cooldown suggests a 40% risk of a recession over the next 12 months. “That’s an elevated recession risk.” n nWithout up-to-date government data, businesses may be hesitant to take actions such as major expansions or hiring sprees, while consumers could seek to avoid big-ticket purchases, some experts said. n n”In general, the absence of economic data makes the economic trajectory more uncertain as it forces investors and business executives to be more cautious,” Gregory Daco, chief economist at accounting firm EY, told ABC News. n nThe Federal Reserve is set to announce its next interest rate decision on Oct. 29, following a meeting between members of the FOMC. If the government shutdown remains in place ahead of that meeting, it could leave Fed officials ill-equipped to set the best policy, Hamrick said. n n”This is an exceptionally difficult period to read where inflation is going and where growth is going,” Kenneth Rogoff, a professor of economics at Harvard University, told ABC News. n nTo be sure, an interruption of data releases could leave investors unaware of possible improvement in the economy. Some experts noted the continued availability of private sector data sources, though observers typically view such data as inferior to government statistics. n nA government shutdown typically risks only modest damage to the U.S. economy, stemming mainly from furloughed public workers, who temporarily lose out on pay and put a dent in U.S. consumer spending. n nEach week of a potential government shutdown would reduce annualized real gross domestic product growth in the quarter by about 0.1%, Mark Zandi, chief economist at Moody ‘s Analytics, told ABC News in a statement. n nFor reference, the economy grew by an average annualized rate of 1.6% over the first half of 2025, meaning it would take several weeks of a government shutdown for notable damage to be incurred. n nAn absence of economic data could make it more difficult for observers to identify the economic impact of the shutdown, some experts said. n n”Typically, shutdowns are not major events, but nothing is typical about the current environment,” Rogoff said.