Market Volatility Amid Government Shutdown
Eddie Gabour, a co-founder of Key Advisors Wealth Management, recently shared insights on market fluctuations as Washington state approaches a shutdown deadline. He advised investors to tread carefully, especially with Thanksgiving around the corner.
The current government shutdown has significantly affected the stream of economic data from federal agencies. A notable casualty is the postponement of October’s jobs report, the latest in a series of delays caused by the ongoing deadlock.
Since the shutdown commenced on October 1, most staffers at the Department of Labor and other agencies vital for economic reporting have been furloughed. This situation is poised to extend into November, marking what’s become the longest federal shutdown in U.S. history and contributing to further delays in economic reports.
The Bureau of Labor Statistics had planned to unveil the October employment figures on Friday, but operations remain stalled due to the shutdown.
The October jobs report is just the tip of the iceberg; the September report was also set to be released shortly after the shutdown began. Other important indicators, like the Commerce Department’s gross domestic product report and the personal consumption expenditure index—often used to gauge inflation—have likewise faced delays.
Interestingly, October job cuts hit their highest numbers in more than two decades, as companies cited cost-cutting measures and the influence of AI technologies.
During the previous administration, some Bureau of Labor Statistics employees were temporarily recalled to complete the September Consumer Price Index report, a crucial piece of data released by the end of October since it impacts the annual adjustment for Social Security benefits.
As for when lawmakers will resolve the shutdown? That’s still uncertain. Historical timelines from past shutdowns could give a glimpse into when delayed reports might eventually see the light of day.
In 2013, for instance, the government shutdown delayed the September employment report, originally due for release on October 4. It was finally issued on October 22, just days after the shutdown ended on October 17.
Similar instances arose back in early 1996 when the December 1995 employment figures, set for release in early January, were postponed until mid-month because of another shutdown.
Goldman Sachs economists anticipate that, based on the patterns observed during the 2013 shutdown, the September jobs report could be available a few days after the government reopens, likely in mid-November. However, forecasts suggest the October data might not be released until early December.
The report from Goldman also indicated that the release of next month’s data could be pushed back by a week to ensure that staff have sufficient time to process the information following the shutdown. If the closure wraps up soon, the November jobs report might not be available by its planned December 5 date.
