As the U.S. government prepares to reopen—potentially by the end of the week—statistical agencies are poised to release a backlog of critical economic data that had been withheld during the record-long shutdown, which began October 1.
September’s delayed labor and inflation figures are expected to be published within days. However, the timely availability of essential reports for October and November remains in doubt, likely arriving too late for the Federal Reserve’s policy meeting on December 9-10.
According to Gregory Daco, chief economist at EY-Parthenon, the employment data for September was “largely ready [before the shutdown] so it could be released within a couple of days of the reopening.”
Other September economic indicators—including retail sales, trade balances, and the personal consumption expenditures (PCE) price index—are also expected to be released in short order, along with official reports on initial and continuing jobless claims. Maurine Haver, CEO of Haver Analytics, noted: “Claims should be the easiest to start up as the states have continued to submit weekly during the shutdown. Only the Virgin Islands hasn’t produced figures.”
Conversely, assembling October’s economic data presents greater challenges. The hiatus in government operations hampered agencies’ collection and processing of surveys and price checks, likely causing extended delays and greater uncertainty in the eventual results.
Wall Street’s focus has shifted to the release of these delayed data points, especially the September jobs report, with Morgan Stanley economists emphasizing its heightened importance for the Federal Reserve’s December policy decision. The note from Morgan Stanley—based on available data—suggests labor market slack remains a dominant concern, stating: “We think the data in-hand by the time of the December Fed meeting will be enough for them [the Fed] to cut.”
Morgan Stanley anticipates the September payrolls report will be rolled out roughly three days post-shutdown, adding that the largely pre-collected data should reinforce a narrative of tepid hiring. The firm expects 50,000 new jobs added in September, with the unemployment rate holding steady at 4.3%. However, these projections could shift if stronger-than-expected data emerge, potentially prompting the Fed to reconsider a rate cut in December. “With the renewed focus on data rather than risk management, stronger data could mean the Fed pauses in December,” their note cautioned.
Adding to the policy debate, Fed Governor Stephen Miran on Monday called for a 50 basis point reduction at the December meeting to shield the economy from possible headwinds.
