With the federal budget set to expire on September 30, and no agreement yet on a temporary funding bill, investors are bracing for disruptions that could ripple through markets.
Labor Department Contingency Plan
In a 73-page contingency plan released last week, the Department of Labor said its goal is to ensure agencies can suspend programs and operations in an orderly manner if a shutdown occurs. The plan makes clear that the Bureau of Labor Statistics (BLS) will halt all operations, meaning no scheduled economic data will be released until funding is restored.
That includes the non-farm payrolls report, one of the most closely watched indicators of U.S. economic health. The timing is especially sensitive, as recent data has shown a sharp slowdown in job growth. Also at risk is the department‘s weekly jobless claims report, another key gauge of labor market conditions.
CPI Data Also at Risk
The shutdown could also delay the release of the Consumer Price Index (CPI), scheduled for October 15. This report is the last major inflation reading before the Federal Reserve's October 28–29 policy meeting, making it a crucial input for rate-setting decisions.
Without CPI data, the Fed may have to rely on incomplete or outdated information as it weighs its next move. The central bank cut rates earlier this month but remains caught between slowing job growth and stubbornly high inflation.
Broader Impact on Economic Data
The BLS typically publishes about a dozen reports each month, covering everything from import and export prices to wages and consumer spending trends. According to the plan, not only will new reports be suspended, but data collection for ongoing surveys will also stop.
That means even after a shutdown ends, there could be delays in producing accurate statistics. The plan also notes that the BLS website will not be updated during the shutdown, and any technical issues will go unresolved.
Political Standoff Raises Stakes
President Donald Trump is scheduled to meet with congressional leaders from both parties at the White House in a last-ditch effort to avoid a shutdown. But deep divisions remain, particularly over health care subsidies, raising concerns that a funding lapse may be unavoidable.
For markets, the immediate concern is the loss of timely economic data. Investors, analysts, and policymakers rely heavily on the Labor Department’s reports to gauge the health of the economy and anticipate Fed policy. Without them, uncertainty could rise, potentially fueling volatility in stocks, bonds, and currencies.
The Bottom Line
If the government shuts down, the non-farm payrolls report, jobless claims, and CPI data will all be suspended — depriving investors and the Fed of critical insights at a pivotal moment. While shutdowns have historically been more of a political drama than a lasting economic shock, the absence of fresh data could complicate decision-making and heighten market jitters.