The ongoing federal government shutdown has triggered a major information blackout on the state of the U.S. economy, just when policymakers most need employment data, with economist Mark Zandi warning that, according to alternative indicators, the job market is “weak and getting weaker.”
The Bureau of Labor Statistics failed to release its September jobs report on Oct. 4 due to the government shutdown that began on Oct. 1. This marks the first time since 2013 that the monthly employment report has been delayed by such circumstances. The timing proves particularly problematic as Federal Reserve officials prepare for their Oct. 28-29 meeting where they must decide on additional interest rate cuts.
Mark Zandi, Chief Economist at Moody’s Analytics, emphasized the severity of this data vacuum in his Oct. 5th social media posts, stating: “The bottom line is that not having the BLS jobs data is a serious problem for assessing the health of the economy and making good policy decisions.” The economist noted that while private data sources are “admirably filling the information gap,” they reveal troubling trends in the labor market.
With official statistics unavailable, economists have turned to alternative data sources that paint a concerning picture of job market conditions. Revelio Labs, which analyzes professional networking platforms like LinkedIn, reported that the U.S. economy added only 60,000 jobs in September. However, Zandi expressed skepticism about even this modest figure, noting that “this paltry gain likely overstates things, as Revelio’s data has been revised significantly lower of late.”
Meanwhile, ADP’s private payroll report showed an even bleaker scenario, with a net loss of 32,000 jobs in September. Zandi suggested this figure likely “understates the decline” because it excludes government job cuts from the Trump administration’s Department of Government Efficiency (DOGE) initiatives.
When combining both datasets, Zandi concluded there was “essentially no job growth during the month” of September. The economist noted that what limited growth occurred was concentrated almost exclusively in healthcare and education sectors, and primarily in three wealthy states: California, New York, and Massachusetts.
According to Zandi’s analysis, 22 states and Washington, D.C., are already showing signs of recession, and he has warned that the U.S. economy as a whole is “on the precipice” of a broader downturn. The economist noted that “smaller companies are getting hit hardest by the tariffs and restrictive immigration policies.”
Without the official September jobs report, Fed officials must rely on existing indicators such as unemployment claims, consumer confidence measures, and private sector employment metrics.
“There is no more important economic data, particularly now, when the job market is sputtering and the Federal Reserve is a few weeks from another meeting when it must decide whether to continue cutting interest rates. The #BLS has done all the work putting the data together – the jobs report sitting on the proverbial shelf set to be released – but the shutdown forestalled this,” Zandi wrote on X.
The government shutdown, now in its eighth day as of Oct. 8, has furloughed approximately 750,000 federal employees. The Congressional Budget Office estimates that each day of the shutdown results in approximately $400 million in compensation costs for furloughed workers. President Trump has indicated he may scrutinize current federal payroll levels, raising the possibility that some furloughs could become permanent.
“We can do things during the shutdown that are irreversible, that are bad for them and irreversible by them, like cutting vast numbers of people and cutting things that they like, cutting programs that they like,” Trump told reporters in the Oval Office on Sept. 30. “They’re taking a risk by having a shutdown.”
