Key Takeaways
- Data Blackout Looming: A government shutdown would halt Labor Department releases on jobs and inflation, forcing the Fed to rely on alternate data ahead of its Oct. 28–29 meeting.
- Fed’s Backup Plan: Chicago Fed President Austan Goolsbee says the bank will lean on private-sector sources, hiring and layoff estimates, and its own “Nowcast” models if official data is unavailable.
- Partisan Gridlock at Fault: While the House passed a continuing resolution, Senate Democrats are blocking progress by demanding continued funding for healthcare subsidies, risking economic uncertainty.
With Democrats dragging their feet on funding, the Federal Reserve may soon be flying blind. Chicago Fed President Austan Goolsbee admitted Tuesday that if a government shutdown begins at 12:01 a.m. Wednesday, the central bank won’t have access to critical economic data in the lead-up to its Oct. 28-29 policy meeting.
“The Bureau of Labor Statistics is the best source of data that we have,” Goolsbee told FOX Business’ Edward Lawrence. “It pains me that we wouldn’t be getting official statistics at exactly a moment when we’re trying to figure out is the economy in transition.”
The Labor Department confirmed it will halt all releases if the shutdown hits, delaying key reports on jobless claims, nonfarm payrolls, and the consumer price index — metrics the Fed relies on to guide interest rate decisions. Without them, the central bank will turn to private-sector indicators and its own modeling.
“Just recently, the Chicago Fed introduced the labor market indicators… we will lean heavily on our hiring rate estimates, on our layoffs and other separate rate estimates and on our Nowcast of the unemployment rate if we can’t get the official data,” Goolsbee explained.
The timing couldn’t be worse. Inflation, hiring, and layoffs are already in flux, and markets need clarity. Yet Democrats are holding up a clean continuing resolution, demanding more healthcare subsidies. Once again, partisan brinkmanship risks real economic consequences — leaving America’s central bank scrambling for answers.