White House Warns of Shutdown Impact on Inflation Report

The White House expressed concerns on Friday regarding a potential government shutdown, suggesting it could delay or eliminate the next inflation report and lead to significant economic repercussions.

A post from X’s Rapid Response 47 account stated, “For the first time in history, there may not be an inflation announcement next month.” The message pointed out that, due to a shutdown led by the Democratic Party, vital data collection is hampered, which could have devastating effects on the economy.

Meanwhile, the Labor Department reported a strong stock market performance, with the inflation rate recorded at 3%—surpassing expectations. This rate, the highest since January, is up from 2.9% in August. Core prices, which don’t factor in food and energy, also increased to 3% from 3.1% the previous month. Wall Street reacted positively to the latest inflation data.

“The stock market is stronger than ever because of tariffs!” Trump stated on Truth Social.

Investors are banking on further rate cuts from the Federal Reserve following this new batch of inflation data. Core inflation, excluding food and energy, saw a monthly rise of 0.2% and an annual increase of 3.0%. Gasoline prices, which have been a major contributor to inflation, rose by 4.1% after a period of decline.

White House press secretary Caroline Levitt commented on the encouraging figures, attributing them to Trump’s economic policies. She noted that the September inflation rate came in lower than market forecasts and emphasized how unfortunate it is that Democrats are using this situation as leverage for healthcare funding for undocumented immigrants. Levitt warned that, if the Democrats go ahead with the shutdown, the absence of the October inflation report could leave various sectors in disarray.

The administration’s emailed statement conveyed that, for the first time, researchers are unable to be deployed, which hinders the inflation announcement for next month.

Amid these discussions, Republicans blamed Democrats for the shutdown, claiming they lacked the necessary funding to restore health benefits to undocumented immigrants through a continuing resolution, which also aimed to extend expiring tax credits related to Obamacare. Democratic leaders, however, countered this narrative, attributing the shutdown to Trump and Republican lawmakers.

Though the overall economy has been showing steady growth, there are mixed signals as employment figures show a slowdown. Rent increases were minimal at 0.2%, marking the smallest annual rise in about four years. Consumer prices rose 3% year-on-year in September, up from 2.9% in August.

Interestingly, inflation has been climbing at a slower rate than many analysts had anticipated since Trump imposed tariffs in April, which were predicted to increase annual inflation by roughly 0.4 percentage points. Some of those tariffs have since been reduced, yet many companies are hesitant to fully transfer costs to consumers due to fears of sales decreases. Should these tariffs become permanent, prices might rise further in the coming months.

Federal Reserve Chairman Jerome Powell is expected to announce an interest rate cut again next week, even as inflation remains above the desired 2% target. National Economic Council Chairman Kevin Hassett shared a positive outlook on the numbers, indicating that inflation trends appear to be heading in the right direction, despite the reporting agency’s closure.

Hassett remarked, “This is a really great report. The market is responding well to the good news, as many economists suggest this number will rise significantly.” Even with a temporary spike in gas prices due to refinery closures, he believes inflation will continue to decline once the government reopens.

As such, the reaction in the markets seems more tied to a belief in a stable inflation outlook rather than an actual perception of rising inflation.