US economy faces blind spot as shutdown freezes key statistics

AFP :

The ongoing US government shutdown has left policymakers, businesses, and financial institutions operating in the dark for almost a month, as the release of crucial federal economic data including employment figures, trade statistics, and GDP numbers has been halted.

The situation is expected to worsen as GDP data for July to September, measuring growth in the world’s largest economy, will likely remain unpublished until the shutdown ends.

Only a few furloughed staff have been recalled to release key inflation figures needed for Social Security calculations,report AFP.

Congressional Republicans and Democrats remain at an impasse, blaming each other for the shutdown, with no immediate resolution in sight.

Analysts warn that this information blackout could slow hiring and investment, as businesses rely heavily on government data to make decisions.

“There’s a huge demand right now for government data. Every industry is trying to figure out if the Federal Reserve is going to keep cutting interest rates,” said Heather Long, chief economist at Navy Federal Credit Union.

The Fed’s decisions depend on accurate economic information, including inflation trends and the jobs market.

The shutdown comes at a critical time, as many organizations finalize budgets for 2026.

Long noted, “Almost any company is sitting there thinking: Do we expect an uptick, a slowdown, or a recession next year?”
The Congressional Budget Office estimates the shutdown could cost the US economy up to $14 billion.

Economists also warn that firms may reduce hiring and investments due to uncertainty.

“Businesses would therefore reduce their overall hiring to be on the safe side,” said Matthew Martin of Oxford Economics.

If the shutdown continues through mid-November, most delayed economic reports may not be released until December, according to Goldman Sachs. Long added that prolonged delays could even lead to “tainted data,” as recollections from later surveys may be unreliable.

While private sector data can provide some insights, experts emphasize that it cannot replace government statistics, which are considered the gold standard.

“We have a remarkable amount of uncertainty about what’s happening with labor supply,” said Wendy Edelberg of the Brookings Institution.

Wells Fargo economist Sarah House warned that the shutdown is already affecting everyday economic activity.

“If you’re not sure when your next paycheck is coming, you might delay dining out, trips, or discretionary purchases,” she said, highlighting the ripple effects on the broader economy.