CPI delays, non-farm missing, will the Federal Reserve rely on "wild ways" to set interest rates this month?

The U.S. government shutdown is putting policy makers in the "blind" dilemma of the crucial moment in the U.S. economy. Currently, Federal Reserve officials are facing a key decision point on interest rates at the end of October - they need to decide whether to continue cutting interest rates or to keep rates unchanged. However, due to the impact of government funding shortages, many agencies that release core economic indicators, including the U.S. Bureau of Labor Statistics and the U.S. Bureau of Economic Analysis, have significantly reduced operations, leading to severe delays in updating key data. The Consumer Price Index, originally scheduled to be released on October 15, 2025, was forced to be postponed until October 24, while core indicators reflecting economic performance such as the monthly employment report, retail sales data, etc., have been postponed indefinitely. When Federal Reserve officials convene for the interest rate meeting on October 28th to 29th, they will have to rely more on historical data, existing trends, market rumors, and alternative data provided by the private sector to assess the direction of the economy. This data vacuum significantly increases the difficulty of policy making: the lack of official statistics makes it difficult for the Federal Reserve to accurately judge whether inflation has stabilized in the target range or to accurately assess the actual speed of the labor market cooling. How does the government shutdown affect the collection of economic data by the government? The impact of the government shutdown on the collection of key economic data by the U.S. government is attracting high market attention, with the most prominent being the monthly Consumer Price Index (CPI) report - a key basis for the Federal Reserve's interest rate policy. The Bureau of Labor Statistics (BLS) needs to manually collect price data for about 80,000 commodities in three ten-day periods each month. However, the government shutdown crisis has led to an estimated one-third loss of October price data by Morgan Stanley economists on October 10th. Erika Groshen, who served as BLS commissioner during the 2013 government shutdown, pointed out that although agencies can make up for some of the losses through overtime or using estimation methods (filling in missing prices with similar available data), the quality of data will continue to decline over time. Omar Sherif, president of Inflation Insight LLC, warned in an interview on October 9th, "From now on, the accuracy of the data will deteriorate, and by the third week, there may be extremely low-quality data - or even completely missing." As an important inflation indicator released by the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index, which uses CPI pricing data as one of its inputs, will also be affected by the government shutdown. In contrast, the damage to other government data is considered relatively manageable. For example, the BLS monthly employment report relies on two separate surveys: a survey of employers and government agencies for estimating nationwide job additions, and a household survey providing unemployment rate data. Analysis by Morgan Stanley shows that employer organizations typically retain their own employment data, so wage estimate delays are minimal; although the household survey is delayed, the response rate remains normal under similar circumstances in 2013. Retail sales data compiled by the Census Bureau may not be directly affected by the government shutdown due to its submission by mail and online. What are the historical precedents? The government shutdown is the 15th shutdown the U.S. federal government has experienced since 1981, each causing various federal agencies to temporarily suspend operations due to funding gaps. At least four government shutdowns, including the current one, have caused delays in important economic reports. During the 21-day shutdown from December 1995 to January 1996, the employment report scheduled for release in December was delayed by two weeks. Catherine Abraham, who was then commissioner of the Bureau of Labor Statistics, recounted that the shutdown resulted in a drop in the contact rate for household surveys, with data collection work being interrupted, but the agency assessed that such interruptions "did not significantly affect the estimation results." The employment reports in September and October 2013 were both delayed due to the autumn government shutdown that year. Other data released by the Census Bureau and the Bureau of Economic Analysis - including trade data, retail sales, and GDP estimates - were also delayed. The 35-day shutdown in December 2018, the longest in U.S. history to date, caused more severe interruptions in economic data. This shutdown directly led to delays in core economic reports such as retail sales and GDP, and some data such as initial trade and inventory statistics were even permanently canceled and never released. It is worth noting that the Bureau of Labor Statistics (BLS) remained operational during this period, with its employment report and Consumer Price Index (CPI) and other key data being unaffected, mainly due to the funding support it had received previously to maintain its basic functions during the shutdown. Are there private data that can replace U.S. government economic data? In the absence of government data, economic data provided by the private sector has become an important supplement. For a long time, several private institutions have continued to compile their own economic indicators as an alternative source of official data during government shutdowns and continued to be used to supplement official statistics after government operations resumed. For example, ADP Research publishes private sector employment estimates based on a sample of over 26 million employees each month, while Indeed provides job vacancy data; job listing company Challenger, Gray & Christmas regularly releases layoff notices, and Revelio Labs independently generates labor market estimates by analyzing over 100 million online job profiles to reflect recruitment trend dynamics. Wall Street institutions also participate in this alternative data system - the Carlyle Group and Bank of America release labor market updates, providing wage growth and other indicators of valuation; institutions like Goldman Sachs use state-level data to estimate the number of unemployment claims. Although these private indicators may differ in data collection methods, scope of coverage, and statistical metrics, they cannot completely replace the authority of official reports, but through cross-verification of multi-dimensional data, they can still to some extent fill the data vacuum left by the government, providing decision-making references for market participants. What data will the Federal Reserve rely on for the next interest rate decision? When making the next interest rate decision, the Federal Reserve is facing the dual consideration of a slowdown in the labor market and the effects of tariff inflation. While the available information has been reduced, the decision-making level is still seeking balance through multi-dimensional data. According to an interview revealed on October 10, 2025, Federal Reserve Governor Christopher Waller acknowledged the indicative value of reports by the Carlyle Investment Group and ADP - Carlyle estimated that only 17,000 jobs were added in the US in September, and combined with other unofficial data sources, Waller emphasized that "although this data is not as comprehensive as government statistics, they all point to a consistent conclusion of weak labor market." Of note, the Bureau of Labor Statistics will release the September Consumer Price Index (CPI) report before the next Federal Reserve meeting, providing a key inflation reference for policy making. However, the risk of a government shutdown has substantially affected the efficiency of data collection - the October CPI report scheduled to be released in November may be delayed due to the shutdown, potentially complicating decision-making. Fed Chairman Jerome Powell warned explicitly at a public meeting on October 14th: if data for October cannot be collected on time due to the shutdown, policy making will face greater challenges. In addition to official data, the Federal Reserve also considers supplemental indicators from the private sector and local governments, such as state-by-state non-seasonally adjusted unemployment claims, and building permit data released by local governments. However, economists at the Royal Bank of Canada pointed out in a research report on October 10th that the decline in data availability will dramatically increase the difficulty of the Federal Reserve's work for the rest of 2025. Particularly under the framework of responsibility, the dual pressure of a weak labor market and tariffs on consumer prices make it difficult for policy makers to clearly judge the inflation trend, thereby affecting the precision of interest rate decision-making.