The recent government shutdown has disrupted the anticipated release of crucial labor market data, forcing economic analysts to seek alternative indicators to assess the health of the U.S. employment landscape. The Bureau of Labor Statistics’ September jobs report, typically a bellwether for economic trends, was postponed, leaving a void in timely official statistics. This reliance on non-governmental data underscores the fragility of economic monitoring during periods of federal fiscal impasse.
Economists had projected a modest job creation of approximately 50,000 positions for September, a figure that would align with recent trends of moderating job growth. Previous reports indicated a slowdown, with August initially showing only 22,000 jobs added, and revised figures for July and June revealing gains of 79,000 and a loss of 13,000 jobs, respectively. This pattern suggests a cooling, rather than an overheating, labor market.
In the absence of the official jobs report, the Federal Reserve Bank of Chicago’s Labor Market Indicators offers a real-time perspective. This proprietary tool provides a dynamic forecast of the unemployment rate and tracks key metrics like the hiring rate for unemployed individuals and the rate of job separations. Such alternative data sources become invaluable when official channels are interrupted.
The Chicago Fed’s model indicated a slight uptick in the real-time unemployment rate for September, projecting it to reach 4.34%, a marginal increase from 4.32% in August and a notable rise from 4.09% recorded in September of the previous year. This projection, while slightly higher than the consensus estimate of a flat 4.3%, still points to a relatively stable, albeit tightening, labor market.
Further insights from the Chicago Fed’s tool suggest a minor deceleration in the rehiring of unemployed workers, with the hiring rate estimated to have fallen to 45.22% in September from 45.61% in August. Concurrently, the rate of layoffs and other job separations saw a slight increase to 2.10%, up from 2.09% the prior month and 2.06% in September 2024. These movements, while small, contribute to a nuanced understanding of labor market dynamics during this data void.
The duration of the government shutdown remains uncertain, but historical precedents suggest that the Bureau of Labor Statistics will likely release the delayed September jobs report shortly after funding is restored. Past shutdowns have caused significant delays; for instance, the September 2013 report, originally slated for early October, was not published until October 22nd, following the shutdown’s resolution on October 17th. A similar postponement occurred in early 1996, delaying the December 1995 jobs report. Notably, during the extended 2018-2019 shutdown, the Bureau of Labor Statistics operated under existing appropriations, which did not necessitate a delay in jobs reports.
Beyond aggregate data, surveys of small businesses offer a ground-level view of employment conditions. A recent survey of National Federation of Independent Business (NFIB) members revealed that 32% of small business owners reported unfilled job openings. Of these, 28% were seeking skilled labor, while 13% were looking for unskilled workers. This persistent demand for labor, particularly skilled workers, highlights ongoing structural challenges in the job market.
Furthermore, the NFIB survey indicated that a seasonally adjusted net 16% of small business owners plan to hire new employees within the next three months. This represents a sequential increase for the fourth consecutive month, suggesting a continued, albeit gradual, expansionary sentiment among a segment of the business community. Despite labor market challenges, overall sentiment from small business owners, as reflected in August’s broader NFIB report, suggests a general sense of economic well-being, with no immediate indications of an impending recession.
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Lucas turns raw market data into actionable strategies, spotting trends in a heartbeat. With 9 years managing portfolios, he treats market volatility like a surfer riding big waves—balance and timing are everything. On weekends, Lucas hosts “Bull & Bear Banter” podcasts, showing that finance discussions can be as entertaining as they are informative.