Recent labor market indicators point to a peculiar economic pattern: employment growth remains stagnant despite strong business investment and consumer spending. The ongoing government shutdown has delayed the release of the official monthly jobs report, depriving policymakers and analysts of a critical economic benchmark.
Private-sector data offers partial insights, though it lacks the comprehensive scope and historical consistency of federal surveys, which remain the gold standard in economic measurement. In the absence of official figures, the ADP employment report emerged as a key reference. It revealed that the economy lost 32,000 private-sector jobs in September, while a major revision turned previously reported gains in August into a marginal decline.
Economists had expected around 55,000 jobs added in September, following 22,000 in August—though those numbers await revision in the delayed government report. Similarly, Indeed’s job listings data showed a 2.5% drop in overall postings by September 26 compared to the prior month. Its wage tracker, based on advertised salaries, indicates a continued slowdown in wage growth.
Additional signals came from recent surveys. The Institute for Supply Management reported that both service and manufacturing sectors continued to reduce staffing, albeit at a slower pace than in August. About 64% of manufacturers—many affected by trade tariffs—indicated that workforce management, rather than hiring, remains their priority.
While private payroll data aligns closely with the government’s business survey, it provides limited insight into labor force participation and the unemployment rate—metrics derived from the monthly household survey of approximately 60,000 homes. These indicators are especially vital now, as economists debate whether weak job growth stems from immigration enforcement reducing the labor pool.
They also help determine whether the current “low-hire, low-fire” labor market is shifting toward increased layoffs. A real-time estimate from the Chicago Federal Reserve, combining public and private data, suggests the unemployment rate held at 4.3% in September. Goldman Sachs estimated initial jobless claims at 224,000 for the final week of the month—consistent with prior weeks and showing no sign of rising layoffs.
Daniel Zhao, Glassdoor’s chief economist, noted Friday that the data gap “increases the uncertainty around the health and trajectory of the labor market at a time when policymakers are looking for clues that the labor market is tipping into decline.”
If the shutdown persists, Federal Reserve officials will face greater challenges heading into their next policy meeting. The lack of official confirmation could cloud their decision-making, especially as they consider further interest rate cuts.
Despite data limitations, current signals support a cautious easing stance due to weakening labor conditions. Private-sector reports confirm a continued slowdown in hiring, offering some confidence that the job market has not suddenly rebounded—thus preserving the rationale for rate reductions.
At their last meeting, most Fed committee members projected at least two additional rate cuts in 2025, with only two meetings remaining. While the absence of official data complicates validation, private indicators reinforce the view that labor market momentum remains subdued.
Notably, Chicago Fed president Austan Goolsbee remarked on public radio’s Marketplace that while alternative labor data sources exist, reliable non-governmental inflation measures are far fewer—highlighting a growing asymmetry in economic monitoring during the shutdown.
— news from Axios
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Hiring data suggests an unusual economic dynamic at play
Those indicators signal that an unusual economic dynamic persisted last month: Employment is barely budging, even as business investment and consumer spending look strong. n nThe big picture: As the government shutdown drags on, so will the delay in key indicators — including the monthly jobs report. n nPrivate sector data can offer some clarity about economic conditions in any given month, though without the massive samples and long track record of government data, which economists consider the gold standard. n nDriving the news: In the absence of that data, the ADP report was this week ‘s headliner. It showed the economy shed 32,000 private sector jobs in September, while a massive revision swung August ‘s previously reported job gains to a slight loss. n nEconomists anticipated the labor market added about 55,000 jobs last month, picking up from the 22,000 added in August (though that number is subject to a fresh revision in the postponed report). n nSimilarly, data from job listings site Indeed shows that as of Sept. 26, overall job postings were down 2.5% from a month earlier. Its wage tracker, based on advertised salaries in job postings, shows a steady slowing in wage growth. n nZoom in: There were other clues about the labor market ‘s health in closely watched surveys released this week. n nThe ISM said that both the service and manufacturing sectors continued to shed jobs, though notably at a slower rate than in August. n nRoughly 64% of manufacturers — a sector walloped by tariffs — said that “managing head count is still the norm at their companies, as opposed to hiring,” ISM said. n nReality check: Most private sector labor reports are similar to the payroll data usually captured by the government ‘s survey of businesses. n nBut private-sector data says very little about the other side of the job market equation: labor force size and the unemployment rate, which is usually supplied by the government ‘s survey of about 60,000 households each month. n nThose household measurements are especially critical at this moment, when economists are unsure whether weak jobs growth is a result of an immigration crackdown that might be shrinking the workforce. n nIt ‘s also critical for clues about whether the “low-hire, low-fire” dynamic is starting to break with a pickup in layoffs. n nThe intrigue: A real-time estimate by the Chicago Federal Reserve based on a mix of public- and private-sector data finds that the unemployment rate would have held at 4.3% in September. n nGoldman Sachs estimated that initial jobless claims were about 224,000 in the final week of September, an estimate the bank arrived at by combining state-level released figures and adjusting them for seasonal factors. n nThat would be roughly in line with the previous week ‘s data, with little signal from the claims data of a pickup in layoffs. n nThe bottom line: The government data delay increases “the uncertainty around the health and trajectory of the labor market at a time when policymakers are looking for clues that the labor market is tipping into decline,” Glassdoor chief economist Daniel Zhao wrote Friday. n nIf the shutdown proves protracted, it will create an unenviable situation for Fed policymakers as they head into their next policy meeting at the end of the month. n nTheir fog of uncertainty would become that much foggier. n nYes, but: Available information points to moving forward with a likely interest rate cut due to the softening labor market — even though the data affirming those plans is increasingly coming from less reliable sources than usual. n nBetween the lines: At their last policy meeting, a majority of Fed policy committee members indicated that they see at least two more rate cuts this year as likely to be justified — with only two meetings remaining in 2025. n nOn the one hand, the absence of government data to ratify the assessment on which those projections are based is problematic. n nBut private-sector labor market data provides supporting evidence that the downshift in jobs continues. n nThat offers some reassurance that there hasn ‘t been a dramatic reacceleration that would change the rate-cutting plans. n nOf note: Chicago Fed president Austan Goolsbee, appearing Wednesday on public radio ‘s Marketplace, noted that while there are many private-sector sources of labor market data, there are fewer non-government sources of inflation data.