The U.S. government is about to reopen, and the September non-farm payrolls may be released as early as Friday. The October non-farm payrolls may be "gone," but Goldman Sachs expects it to be "the worst since December 2020."

As the U.S. government is expected to end its record shutdown this week, investors are about to face sharply cooling labor data. Goldman Sachs predicts that October's non-farm payrolls may even record the first negative growth in nearly three years.

According to Wall Street News, on November 11, the U.S. Senate voted to pass the Continuing Appropriations and Extensions Act, taking a key step toward ending the government shutdown. The U.S. House of Representatives is expected to follow up as early as Wednesday evening, which means that U.S. government agencies responsible for releasing key economic data are also preparing to resume operations.

Goldman Sachs economists expect that the U.S. Bureau of Labor Statistics may release the delayed September non-farm payroll report this Friday, as the data for that report was already collected before the government shutdown. However, the real challenge lies in the data for October.

Wall Street News mentions that White House National Economic Council Director Hassett warned that due to the complete interruption of data collection during the government shutdown, some economic data that should have been collected in October may be "lost forever." However, Goldman Sachs expects that the U.S. non-farm payrolls for October will be revised down by 50,000, which would be the worst data since December 2020.

The data gap comes at a critical moment for Federal Reserve policy-making. Federal Reserve Chairman Powell has admitted that there are "no risk-free options" in the policy path, and the sharp deterioration of the labor market will undoubtedly pose greater challenges for its decision-making.

If subsequent data shows that the labor market is much weaker than expected, the pressure on the Federal Reserve to cut interest rates again this year will significantly increase, but the delays and distortions in the data may also lead decision-makers to "hold steady" at the December meeting.

Data Vacuum Will Break, but October May Become an "Information Black Hole"

Due to the interruption of data collection during the shutdown, the U.S. Department of Labor faces unprecedented challenges.

Boston College economist Brian Bethune stated that the agency could try to ask respondents to recall the situation in October during the November survey or conduct a separate retrospective survey. However, if operationally "unfeasible," the data for October may result in an irreparable gap.

Statements from U.S. White House officials also confirm this concern. Hassett bluntly stated that some surveys relying on manual collection were simply not conducted, meaning that some data for October may be "lost forever."

This not only includes household surveys used to calculate the unemployment rate but may also affect important inflation indicators such as the CPI, which was originally scheduled for release in October. Morgan Stanley economists expect that the release of other key indicators such as inflation and spending may take one to two weeks.

Private Data Shows Weakness, Employment Market Alarm Sounds

In the absence of official data, alternative indicators released by the private sector point to a sharp deterioration in the U.S. labor market.

First, the employment report from the consulting firm Challenger shows that the number of layoffs announced by U.S. companies in October soared to 153,000, nearly three times that of the same period last year, setting the highest record for the same month since 2003 (The number of corporate layoffs has surged, reaching the highest record since 2003)

The company's Chief Revenue Officer Andy Challenger pointed out that, in addition to some industries correcting after the hiring boom during the pandemic, the application of AI, weak consumer and business spending, and rising costs are collectively driving companies to tighten their belts and freeze hiring.

Secondly, the employment report released by payroll processing giant ADP shows that in the four weeks ending October 25, private sector employers reduced an average of 11,250 jobs per week, indicating that the labor market struggled to create jobs in the latter half of October.

Additionally, a report from another data company, Revelio Labs, also showed that after experiencing a relatively strong month, employment decreased by 9,100 jobs in October, marking the second worst performance in 2025 and the second worst month in its historical record (which began in 2021).

Data shows that the job losses were primarily due to a reduction of 22,210 jobs in government sectors, while job losses also occurred in manufacturing and trade sectors.

Goldman Sachs Warns: Layoff Wave May Be Brewing

Goldman Sachs, using its proprietary alternative data model, analyzes that the outlook for the U.S. job market is bleak.

Goldman Sachs' employment growth tracking indicator has slowed from 85,000/month in September to 50,000/month in October. More notably, after considering the impact of government delayed retirement plans, Goldman Sachs expects the official non-farm payrolls for October to be revised down by 50,000.

(Goldman Sachs expects the official non-farm payrolls for October to be revised down by 50,000)

More forward-looking signals come from layoff warnings.

The number of WARN Act notifications (which companies must submit before conducting large-scale layoffs) tracked by Goldman Sachs has risen to the highest level since 2016 (excluding the early days of the COVID-19 pandemic).

(Left image shows an increase in layoff announcements from Challenger and WARN notifications, while the number of initial unemployment claims has not yet risen accordingly) Historical data shows that WARN notices and Challenger job-cut reports typically lead the official initial unemployment claims data by about two months, indicating that official unemployment figures may soon rise as well.

(WARN notices and Challenger job-cut reports typically lead the official initial unemployment claims data by about two months)

Meanwhile, corporate earnings call also reveal a sense of unease.

Goldman Sachs' analysis shows that the proportion of companies in the Russell 3000 index mentioning "layoffs" is on the rise, especially during the ongoing Q3 2025 earnings season.

In the tech industry, half of the discussions about layoffs mention AI; in sectors like finance and real estate, AI is also increasingly linked to the topic of layoffs.

Economic Outlook Adds Uncertainty, Fed Decision Faces Dilemma

The disruption of data and the deteriorating outlook are placing the Federal Reserve in a dilemma.

On one hand, policymakers rely on data to decide whether further rate hikes or cuts are necessary. As economist Brian Bethune stated, the lack of key economic "milestones" to support the Fed's "wait-and-see" approach is concerning.

On the other hand, the rapid cooling of the labor market revealed by private data and leading indicators increases the risk of an economic recession.

Goldman Sachs' model predicts that the likelihood of a significant 0.5 percentage point rise in the U.S. unemployment rate over the next six months has increased from 10% six months ago to 20%-25%.

(Forecast distribution of U.S. unemployment rate over the next six months)

Morgan Stanley economists previously expected the Fed to cut rates again in December, but they also acknowledged that this view would face risks if labor market data comes in stronger than expected.

Now, the chaotic situation of data releases and the pessimistic signals from private data make the balance of risks even harder to gauge. For investors, this means that in the coming weeks, as delayed data is released, market volatility may significantly increase