43-Day Government Shutdown Left the Fed Flying Blind—And Economic Data Still Hasn't Recovered

The longest government shutdown in American history ended on November 13 when President Trump signed a funding bill after 43 days of federal paralysis. But the damage extends far beyond the 1.4 million workers who went without paychecks. For economists, policymakers, and the Federal Reserve, the shutdown created something even more concerning: a permanent hole in the nation's economic data.

October 2025: The Month That Doesn't Exist

Because the Bureau of Labor Statistics could not collect data during the lapse in appropriations, October 2025 has become a statistical black hole. There is no October jobs report. There is no October Consumer Price Index. There is no October data on wages, hours worked, or industry employment.

"BLS could not collect October 2025 reference period survey data due to a lapse in appropriations, and BLS is unable to retroactively collect these data," the agency stated in its official guidance. In tables and charts going forward, October 2025 will be represented by a dash—a permanent reminder of the shutdown's impact.

The administration did grant a special exception to temporarily recall staff to release September's CPI data on October 24, allowing the Social Security Cost of Living Adjustment for 2026 to be announced. But that was the extent of the data salvaged.

The BLS Enters 2026 Weakened

The statistical damage extends beyond missing data. The Bureau of Labor Statistics entered the 2025 shutdown in a weakened condition, having lost almost 25% of its staff since February. Many experienced statisticians and economists left during the uncertainty, and rebuilding that expertise will take years.

This staffing crisis means that even the data now being collected may be less reliable. Response rates for BLS surveys have dropped, collection methods have been disrupted, and quality control has suffered. Economists warn that the numbers coming out of Washington should be viewed with unusual skepticism.

"A barrage of post-shutdown data has left economists with more questions than answers about the state of the U.S. economy. All of that is likely to be bogged down by low response rates, disruptions in data collection and other shutdown-related complications."

— Economic Analysis, December 2025

The Fed Is Flying Blind

For the Federal Reserve, the data gap couldn't have come at a worse time. The central bank's December meeting—at which officials voted to cut rates for the third time this year—was conducted with only outdated information about jobs, inflation, and growth.

Fed Chair Jerome Powell has acknowledged the challenge in unusually candid terms. "What do you do if you're driving in the fog? You slow down," he said, explaining the Fed's cautious approach to policy adjustments. Without reliable data, the central bank is essentially making educated guesses about the economy's direction.

The minutes from the December meeting, released this week, revealed deep divisions among policymakers—with three officials dissenting from the rate cut decision. The lack of current economic data almost certainly contributed to this uncertainty.

Economic Impact: 1-2 Percentage Points of GDP

The shutdown's direct economic costs were substantial. According to Congressional Budget Office analysis, the 43-day federal closure reduced annualized real GDP growth in the fourth quarter by 1.0 to 2.0 percentage points, depending on how quickly normal operations resumed.

Beyond the immediate impact, the shutdown disrupted government services across the country. National parks closed. Tax refunds were delayed. Small business loans went unprocessed. Federal contractors—many of them small businesses—saw cash flow dry up.

Confusing Data Muddies the Picture

The data that has emerged since the shutdown ended has only added to the confusion. November's jobs report showed just 64,000 new positions—far below expectations—while also reporting that unemployment rose to a four-year high of 4.6%. But it also showed a net loss of 105,000 jobs in October, led by a large drop in the federal workforce as 162,000 government workers who'd taken buyouts were officially dropped from the payrolls.

Meanwhile, inflation appeared to improve more than expected, and retail sales showed surprising resilience. But economists caution that all these numbers may be distorted by shutdown-related complications—low survey response rates, sample composition changes, and methodological adjustments.

What This Means for 2026

As the calendar turns, the Fed and other policymakers will be working with a compromised data infrastructure. The BLS is rebuilding, but the process is slow. Survey response rates remain depressed. And the October 2025 gap means that year-over-year comparisons will be complicated for the next twelve months.

For investors and business leaders, the message is clear: treat official economic statistics with more skepticism than usual. The fog that Powell described hasn't lifted—and it may not fully clear until well into 2026.