The U.S. government is about to reopen, September nonfarm payrolls might be released as early as Friday, October nonfarm payrolls may be "gone", but Goldman Sachs expects it to be "the worst since December 2020".
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As the US government is expected to end its record-breaking shutdown this week, investors are about to face rapidly cooling labor data, with Goldman Sachs predicting the number of nonfarm payrolls in October may even record its first negative growth in nearly three years.
According to WallstreetCN, on November 11, the US Senate voted to pass the "Continuing Appropriations and Extension Act," taking a critical step towards ending the government shutdown. The House of Representatives is expected to follow as soon as Wednesday night, meaning the US government agencies responsible for releasing key economic data are also preparing to resume work.
Goldman Sachs economists expect that the US Bureau of Labor Statistics may release the delayed September nonfarm employment report this Friday, since the data was collected before the government shutdown. However, the real challenge lies with the data for October.
WallstreetCN mentions that White House National Economic Council Director Hassett warns that, due to data collection being completely halted during the shutdown, some economic data meant to be gathered in October may be “lost forever.” Still, Goldman Sachs expects the number of nonfarm payrolls in October will be cut by 50,000, which would be the worst data since December 2020.
The data loss comes at a crucial time for Fed policy making. Fed Chair Powell has admitted there are “no risk-free options” for the policy path, and a sudden deterioration in the job market will undoubtedly bring bigger challenges to decision-making.
If later data shows the labor market is much weaker than expected, the pressure for the Fed to cut rates again this year will rise significantly, but delays and distortions in the data may instead incline policymakers to “hold steady” at the December meeting.
Data vacuum to break, but October may be an “information black hole”
Because data collection was interrupted during the shutdown, the US Department of Labor faces unprecedented challenges.
Boston College economist Brian Bethune says the agency can try to ask respondents in November’s survey to recall October’s situation, or conduct an independent retrospective survey. But if operationally “infeasible,” there may be an irreparable gap in October’s data.
Statements by White House officials confirm such worries. Hassett bluntly said that some manually-collected surveys were not conducted at all, meaning some October data may be “lost forever.”
This not only includes household surveys used in unemployment rate calculation, but may also affect important inflation measures like the CPI originally due in October. Economists at Morgan Stanley expect that the release of other key indicators such as inflation and spending may require another one to two weeks.
Private data points to weakness, labor market alarm sounds
In the absence of official data, alternative indicators from the private sector all point to a sharp deterioration in the US labor market.
First, the employment report from job consulting firm Challenger shows that US businesses announced 153,000 layoffs in October, nearly three times the number from the same period last year, a record high for the month since 2003.
(Corporate layoffs surge, the highest since 2003)
The company's Chief Revenue Officer Andy Challenger points out that, besides corrections in some industries after the pandemic hiring boom, AI adoption, weak consumer and business spending, and rising costs are all prompting companies to tighten belts and freeze hiring.
Second, the employment report from ADP, a payroll giant shows that in the four weeks ending October 25, private sector employers cut an average of 11,250 jobs per week, suggesting the labor market struggled greatly to create jobs in the second half of October.
Additionally, another data firm Revelio Labs’ report shows that after a relatively strong month, 9,100 jobs were lost in October - the second worst performance of 2025 and the second worst month on record (since 2021).
Data shows that lost positions were mainly due to a reduction of 22,210 government jobs, with losses also in manufacturing and trade.
Goldman Sachs alerts: Layoff wave may be brewing
Goldman Sachs used its proprietary alternative data model to analyze and believes American employment prospects are dim.
Goldman Sachs’ job growth tracker slowed from 85,000/month in September to 50,000/month in October. More importantly, factoring in delayed government retirement plans, Goldman estimates the official October nonfarm payroll expectation will be cut by 50,000.
(Goldman expects official October nonfarm payroll count to be cut by 50,000)
Even more forward-looking signals come from layoff alerts.
The number of WARN Act notices tracked by Goldman (notices firms must submit before mass layoffs) has surged to the highest since 2016 (except for the early Covid period).
(At left, Challenger layoff announcements and WARN notices have increased; at right, initial jobless claims have yet to rise in tandem)
History shows that WARN notices and Challenger layoff reports usually lead official initial jobless claims by about two months, suggesting official unemployment data may soon climb.
(WARN and Challenger reports typically lead jobless claims by around two months)
Meanwhile, there is unease in corporate earnings calls.
Goldman analysis shows in Russell 3000 index companies, references to “layoffs” are rising, especially in the ongoing Q3 2025 earnings season.
In tech, half the layoff discussions mention AI; in finance and real estate, AI is increasingly linked to layoff themes.
Economic outlook more uncertain, Fed policy in dilemma
Interrupted and deteriorated data is putting the Fed into a dilemma.
On one hand, policymakers rely on data to decide whether to hike or cut rates further. As economist Brian Bethune says, lacking key economic “road signs” makes it hard for the Fed to “hold steady.”
On the other, private and forward-looking data revealing rapid labor market cooling increases recession risk.
Goldman’s model forecasts that the likelihood of US unemployment rate rising sharply by 0.5 percentage point in the next six months has climbed from 10% six months ago to 20%-25% now.
(US unemployment rate distribution forecast for the next six months)
Morgan Stanley economists previously expected the Fed to cut rates again in December, but admit this view will be at risk if labor market data is stronger than expected.
Now, the chaos in releasing data and bearish private signals make it more difficult to weigh risks. For investors, this means in the coming weeks, as delayed data is gradually published, market volatility may rise significantly.
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