Republican "Palace Coup": Vacation Next Week! U.S. Government Shutdown "Difficult to Resolve in the Short Term," U.S. CPI Release May Be Delayed After Non-Farm Payrolls

The U.S. government shutdown crisis continues, with the House Republican leadership deciding not to return to Washington next week, attempting to force Senate Democrats to accept the Republican version of a temporary spending bill. This escalation of strategy indicates that the government shutdown may last longer, further impacting the release of key economic data.

On October 5th, media reports stated that House Speaker Mike Johnson announced that the House would not return to Washington next week. House Majority Whip Tom Emmer stated, "The House has done its work," and Republicans are prepared to return to work immediately after Senate Democrats reopen the government.

The government shutdown has delayed the highly anticipated September non-farm payroll report, causing economists and investors to lose a key indicator for assessing the labor market. In addition to employment data, the shutdown will also affect the collection and release of other important economic data, including the September CPI data originally scheduled for release in two weeks. The 2013 government shutdown lasted 16 days, resulting in delays in the release of various economic data over the following two months.

Republican "Pressure Tactics," Slim Prospects for Senate Agreement

During a conference call on Saturday, the House Republican leadership informed members that they plan to stay away from Washington during the government shutdown.

This marks a further escalation of Republican strategy, attempting to force Senate Democrats to pass the temporary spending measures drafted by Republicans by keeping the House closed. House Speaker Johnson had previously canceled planned votes on September 29 and 30.

Despite the Republicans' "pressure tactics," the prospects for a short-term agreement in the Senate remain bleak. House Democratic leader Hakeem Jeffries criticized Republicans for "going on vacation" instead of negotiating an agreement to prevent millions from seeing a significant increase in healthcare costs. Jeffries stated:

"This government is trying to bully us, and we will not be bullied. Democrats in the House and Senate stand united, believing this issue must be resolved."

Key Economic Data Release Blocked, Market Loses Important Reference

The government shutdown has forced the Labor Department to delay the release of the September employment report, one of the government's most closely watched economic indicators. This report typically drives financial market volatility when employment data is stronger or weaker than expected and provides detailed information on which industries are growing or shrinking.

Economists had originally expected the September report to show that employers added about 50,000 jobs, up from 22,000 the previous month, but far below the 240,000 from the same period last year. The slowdown in job growth is partly attributed to the Trump administration's crackdown on undocumented immigrants, which has reduced the labor supply.

Glassdoor Chief Economist Daniel Zhao expressed hope that the shutdown would be resolved quickly, saying, "We pray," so that the employment report can be regained on the first Friday of each month.

The U.S. Labor Department's website states, "Due to the federal government service suspension, this website is currently not updated. Updates will resume when the federal government is back in operation." Indeed economist Allison Shrivastava stated, "I think everyone would agree this is not the kind of job growth we saw a year ago."

Inflation Data Collection Stalled, Lessons from the 2013 Government Shutdown Remain

University of Michigan economist Betsey Stevenson pointed out that while other information sources like payroll processing companies and job search websites can provide labor market data, they cannot replace the comprehensive coverage of federal government data analysts.

"Nothing can substitute for a survey that covers tens of millions of employees; nothing comes close to that."

In addition to the employment report, the government shutdown also halted information collection for future reports, including the September CPI data originally scheduled for release in two weeks. The 2013 government shutdown lasted 16 days, resulting in delays for the release of various economic data over the following two months.

This data gap poses particularly severe challenges for economic decision-making. Stevenson stated, "We are in a period of economic change, which makes data more valuable than usual."

Businesses and policymakers will have to make their best guesses about the direction of the economy in the absence of accurate data