The U.S. Labor Department will release its long-awaited jobs report for September on October 7, 2023, marking an end to a data drought caused by a 43-day federal government shutdown. This report will provide critical information on hiring and unemployment, which has been largely absent since late summer, leaving businesses, investors, and policymakers without essential economic indicators.
The federal shutdown led to significant delays, affecting over 30 reports from various government agencies, including the Labor Department’s Bureau of Labor Statistics and the Commerce Department’s Bureau of Economic Analysis. Analysts at Jefferies, including Thomas Simons and Michael Bacolas, highlighted that the lack of data has left many in the dark about key economic measures such as inflation and GDP growth.
During the shutdown, the Labor Department also failed to release its weekly unemployment benefits report for seven consecutive weeks. This report is viewed as an early indicator of labor market trends. Although the department managed to publish the consumer price index for September—nine days late on October 24—this was only due to the urgency of its implications for cost-of-living adjustments for millions of Americans.
The interruption of economic data has coincided with a period of uncertainty surrounding President Donald Trump’s trade policies, which have included fluctuating tariffs and extensive immigration enforcement. While economic growth appeared solid earlier in the year and unemployment rates remained low, job creation has shown signs of slowing, and inflation has persistently exceeded the Federal Reserve’s target of 2%.
Analysts expect the September employment report to indicate modest hiring, with an anticipated addition of 65,000 jobs, a slight improvement from August’s lackluster figure of 22,000. Unemployment is expected to remain stable at a low rate of 4.3%.
Investors and Federal Reserve officials are eager for new data to help inform their decisions regarding interest rates. The lack of comprehensive data has intensified debates among Fed policymakers about the necessity of further rate cuts. Some officials have suggested that the absence of data may influence their decisions at the upcoming meeting in December.
The recovery of economic data will take time, even with the government now reopened. Kevin Hassett, a senior economist at the White House, indicated that only parts of the October jobs report, set for release on November 7, will be available. While enough data from businesses is expected to provide job gain or loss figures, the household survey used to calculate unemployment was not conducted during the shutdown. This could result in the Bureau of Labor Statistics failing to produce an unemployment rate for October for the first time in 77 years.
In addition, there will not be an October inflation report due to the same data collection issues. This lack of information presents a challenge for the Federal Reserve as it seeks to gauge whether inflation is moving back towards the target of 2%.
The disruption in data gathering occurred shortly after President Trump dismissed Erika McEntarfer, the former director of the Bureau of Labor Statistics, following the release of employment figures that he found unfavorable. Despite the political turbulence, economists maintain that the forthcoming reports are likely to be free from bias, as the Bureau currently lacks political appointees following Trump’s withdrawal of his nominee.
As the economy continues to send mixed signals, the upcoming jobs and inflation reports will be pivotal for understanding the current state of the U.S. economy and the potential direction of monetary policy.
