The Government Shutdown Is Over. What Now?
- Claire Carpenter
- Nov 18
- 2 min read
Late on the night of November 13th, President Trump signed a bill into law, effectively reopening the government. Beginning on October 1st, the 43 day shutdown marked the longest interruption of federal services in American history. The lapse of federal funding resulted in nearly 1,400,000 government workers going without pay, including staff at key economic research agencies like the Bureau of Economic Analysis and the Labor Department's Bureau of Labor Statistics– both of which release critical reports to investors and policymakers alike.
Now that the government has reopened, we can begin to measure its economic impacts. U.S. futures and markets remained relatively stable: the S&P 500 was up 0.1% and the Dow Jones Industrial Average increased by 0.2%. Still, these marginal increases are no reason to dismiss the wider influences and future implications of the shutdown. First, the U.S. jobs report and the Consumer Price Index (CPI) report will be delayed. Each missed their scheduled release dates due to furloughed workers and halted data collection. The September jobs report is scheduled to be released on November 20th. Some of the October data for the CPI and jobs reports may be lost as the necessary information, collected via in-person visits, cannot be retroactively collected. In addition to this, the Bureau of Economic Analysis missed its October end-of-the-month release of the Personal Consumption Expenditures Price Index, the Fed’s preferred measure of inflation. These wide gaps in economic data leaves the Federal Reserve board in a data fog, making semi-blind decisions based on flimsy, potentially faulty information.
Looking forward, it's unlikely that accurate data can be constructed for the coming months as well. While the November reports are likely to be released on time, employee furloughs and lingering delays limit the reliability of the data collected by the BEA, BLS, and other government agencies. Even if reports are published on schedule, the underlying data may be incomplete, outdated, or skewed by the gaps in collection, distorting economic realities.
With these key economic indicators missing and delayed, the Federal Reserve now faces the challenge of implementing effective monetary policy. On top of this, data gaps and staffing concerns cloud the reliability of economic data both in the recent past and near future. It is important to note that policy decisions in the near future could be made on a margin of error, impacting everything from Fed rate cuts to inflation rates.
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