(Reuters) -Alternate data from public and private sources, a substitute for official statistics delayed by a government shutdown, showed the U.S. job market likely remained stalled in September with sluggish hiring but no change in an unemployment rate economists see as influenced by falling numbers of foreign-born workers.
The federal government’s 15th shutdown since 1981, with some 750,000 workers furloughed, has delayed publication of key reports including the September unemployment and jobs data due on Friday from the Bureau of Labor Statistics, a key reference point for Federal Reserve policymakers who meet in a little under four weeks to decide whether to cut interest rates again.
Also delayed so far are the weekly jobless claims report and factory orders and construction spending data for August.
While the data could still be available for the Fed’s October 28-29 meeting depending on the length of the shutdown, alternative data, such as a new “real-time” estimate of the unemployment rate issued on Thursday by the Federal Reserve Bank of Chicago, is likely to attract more attention from Fed officials, economists and analysts trying to understand the economy while the government is idle.
The Chicago Fed report, which combines private and available public data, estimated the September jobless rate was 4.3%, the same as in August and evidence that a feared rapid rise in unemployment had not yet begun.
But details of the report, along with other data, pointed to ongoing sluggishness in the labor market that is likely to keep the Fed poised to cut the benchmark interest rate by a quarter of a percentage point.
The Fed’s rate cut discussion now leans heavily on policymakers’ views of whether the labor market is holding up, with the 4.3% jobless rate considered around full employment, or is at risk of a sharp rupture. The Fed last month cut its policy rate by a quarter of a percentage point to a range of 4% to 4.25% after job gains slowed sharply and the unemployment rate ticked up in August.
“We’re going to go off of the data we have,” Chicago Fed President Austan Goolsbee said on Fox News’ America Reports on Thursday, adding that to him the bank’s new unemployment number “indicates some steadiness in the labor market.”
The Chicago Fed’s new data series, updated twice monthly, showed the hiring rate for unemployed workers dipping slightly and the rate of layoffs and other job separations up a bit.
That put “limited upward pressure” on the unemployment rate, the bank said.
LABOR MARKET IS STAGNATING
Earlier this week, data from payroll processor ADP indicated private payrolls fell 32,000 in September. The ADP data may also take on added weight in the absence of Bureau of Labor Statistics updates, and was cited by Fed Governor Christopher Waller in August as helping ground internal Fed staff estimates that showed “continued deterioration” in the job market beginning in May.
New data issued Thursday by technology firm Intuit, based on a sample of roughly 400,000 of small businesses from its QuickBooks platform, showed firms with from one to nine employees shed more than 48,000 jobs in September, a decline of around 0.37%. Firms of that size have seen a steady drop in employment since early 2024, with average monthly employment for the latest quarter down about 400,000 from a peak of 13.1 million.
U.S. employers meanwhile announced fewer layoffs in September, but hiring plans this year were the lowest since 2009, according to the latest report from global outplacement firm Challenger, Gray & Christmas that provided further signs of a labor market at a standstill as the demand and supply of workers fall because of tougher immigration policy and technological advances.
The firm said planned job cuts dropped 37% month-on-month to 54,064 in September. Employers have so far this year announced 946,426 job cuts, the highest year-to-date total since 2020.
Hiring plans so far this year have totaled 204,939, the lowest year-to-date since 2009 when the economy was just emerging from the Great Recession.
“Right now, we’re dealing with a stagnating labor market, cost increases and a transformative new technology,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. “With rate cuts on the way, we may see some stabilizing in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring.”
But there are conflicting signals, and a puzzle over whether weak job growth is due to a slowing economy or a lack of workers, or both. Nonfarm payroll gains averaged only 29,000 jobs per month in the three months to August compared to 82,000 during the same period last year, yet the jobless rate has been fairly stable.
Economists say lingering uncertainty from President Donald Trump’s trade policy and the rise of artificial intelligence have reduced demand for workers. But the administration’s immigration crackdown may also be limiting the availability of labor.
In its latest survey, the National Federation of Independent Business reported that 58% of independent business owners planned to hire, more than in August, but that nearly 90% of that group “reported few or no qualified applicants for the positions they were trying to fill,” up seven percentage points from the month before.
Should the shutdown persist into next week, reports due later this month, including consumer price, retail sales, housing starts and producer inflation data for September, will probably not be published, impacting decision-making by households, investors and policymakers.
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</Section>(Reporting by Ann Saphir; Additional reporting by Howard Schneider and Lucia Mutikani; Editing by Jamie Freed and Andrea Ricci)
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