As the U.S. government shutdown hit its sixth day on Monday, experts were raising warnings. They expressed concerns about the effects on the labor market, still the nation’s top economic worry. The ongoing shutdown has delayed the release of a key monthly jobs report. This robs analysts of critical information amid a all too real trend of hiring slowdowns.
Follow along with us to see how the U.S. economy continues to experience a historic hiring slowdown. This nosedive was compounded by downward revisions to prior monthly payroll counts. These revisions turned out to be bad news, showing that the net number of jobs added in 2024 and early 2025 was lower than originally estimated. This uncertainty comes at a pivotal point in time. Inflation is rising, raising fears of “stagflation,” a situation where economic growth stagnates as prices keep rising.
Mark Hamrick, a senior economic analyst at Bankrate, highlighted the gravity of the situation, stating, “It adds to risk and uncertainty at a most inopportune time.” He further elaborated that the absence of government data complicates the economic landscape, saying, “Now we’re all essentially looking through a fog.”
The estimated effect of the current government shutdown on long-term economic growth is particularly glaring. As Mark Zandi, the chief economist at Moody’s Analytics, notes, every week the shutdown lasts reduces annualized real GDP growth by roughly 0.1%. This widespread impact serves to highlight the dramatic economic effects of ongoing shutdowns. Even in a negative scenario, the damage done by government shutdowns is usually modest, at least so far. The short-term impacts always come from the furloughed public employees who lose income, thereby reducing U.S. consumer spending.
He is joined by Kenneth Rogoff, a professor of economics at Harvard University, who has recognized the unprecedented complexity of our current economic climate. “This is an exceptionally difficult period to read where inflation is going and where growth is going,” he remarked, pointing to the challenges faced by economists in making accurate predictions.
Today’s tough economic climate has investors and corporate leaders more risk averse than ever. Gregory Daco, chief economist at accounting firm EY, noted that “in general, the absence of economic data makes the economic trajectory more uncertain.” This lack of clarity is pretty particularly disconcerting. It arrives at a time when their economy only managed to grow at an uninspired average annualized pace of 1.6% in the first half of 2025.
Despite these challenges, experts emphasize that understanding the state of the job market is crucial for assessing overall economic health. Mark Hamrick reiterated this sentiment, stating that “the job market is the primary area of concern for the U.S. economy.” The absence of timely data does nothing but heighten these worries and put decision-makers between a rock and a hard place.
Jim Reid, a research strategist at Deutsche Bank, expressed frustration over what he termed a “data vacuum” created by the shutdown. This lack of consistent and trustworthy data makes it nearly impossible to accurately measure economic recovery and effectively plan for the future.
