The risk of a U.S. government shutdown is high, and the September nonfarm payroll report relied on by the Federal Reserve may be forced to be delayed.

The risk of a U.S. government shutdown is high, and the September nonfarm payroll report relied on by the Federal Reserve may be forced to be delayed.

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According to an operational plan released earlier this year by the U.S. Department of Labor, if the U.S. federal government shuts down, the nonfarm payrolls report for September, originally scheduled to be released next Friday, will be delayed.

Since most government agencies, including the U.S. Bureau of Labor Statistics (BLS), which is responsible for compiling the monthly nonfarm payrolls report, have not yet made their latest contingency plans public, the specific scope of the shutdown remains unclear. According to Bloomberg, the contingency plan updated by the Department of Labor in March this year shows that all data collection and scheduled economic data releases will stop. The Department of Labor has not responded to inquiries about whether it will update this plan. The BLS is affiliated with the Department of Labor.

According to the March plan, about 2,000 BLS employees will be furloughed, with only the director continuing to work. Currently, William Wiatrowski remains the acting director until a new director nominated by President Trump is confirmed by the Senate.

The plan also stipulates that the BLS website will not be updated during the government shutdown, and technical issues will not be fixed. Meanwhile, it warns that a decline in data collection quality may affect the accuracy of future estimates.

The U.S. government shutdown may also affect the release of the September Consumer Price Index (CPI) scheduled for October 15. A delayed release could interfere with the Social Security Administration’s (SSA) arrangements to announce annual cost-of-living adjustments to retirees.

Currently, Trump is unconcerned about the threat of the U.S. government facing its first shutdown in nearly seven years and blames any potential chaos on the Democrats. “These people are really crazy, these Democrats, so if we have to shut down, then shut it down,” Trump told reporters as he left the White House, “but it is they who are shutting down the government.” With only four days remaining before government funding runs out, Trump’s remarks reflect the Republican leadership’s belief that they have the upper hand in the shutdown standoff.

If the U.S. Congress fails to pass a budget bill before the end of the current fiscal year next Tuesday, the risk of a government shutdown is imminent.

If there is a prolonged government shutdown leading to delays in BLS data, the Federal Reserve may lack several key employment and inflation statistics before its next policy meeting on October 28–29.

Federal Reserve policymakers this month cut interest rates for the first time this year due to signs of a cooling labor market. They are closely monitoring new economic data to determine whether further reductions in borrowing costs are needed. Without the official employment report, the Fed will have to rely on narrower private data.

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