The Impact of the Government Shutdown on Employment Data
The government shutdown that began on Wednesday has caused a delay in the release of the September jobs report, which was supposed to be released on the first Friday of the month. This report is crucial in understanding the state of the economy, and its delay has left many people wondering about the current job market.
Why Employment Numbers Matter
Employment numbers are a key indicator of the economy’s health. When companies hire consistently, it means they are confident about future growth. On the other hand, when hiring slows or stops, it can lead to trouble, including recessions, business closures, and widespread unemployment. The Federal Reserve uses these numbers to make major economic decisions, including setting interest rates.
How the Jobs Data Gets Collected and Revised
The monthly jobs numbers are not set in stone and go through multiple rounds of revisions as the Bureau of Labor Statistics gets more complete information. The process involves monthly surveys of about 60,000 businesses, regular revisions as additional responses come in, and an annual benchmark review that checks estimates against unemployment insurance tax records from nearly every employer in the US.
What a Jobs Slowdown Means for You
A weakening labor market can influence your job, everyday expenses, and overall finances in several ways. Here are a few things to consider:
1. It Could Be Harder to Find a Job or Get a Raise
Weak hiring could mean fewer opportunities for you to switch jobs or negotiate a higher salary or better employment terms. The number of people who have been out of work for six months has increased, making it harder for people to find work.
2. Gas and Groceries Cost More
Rising inflation hits your wallet directly as higher prices at the grocery store, gas station, and everywhere else you spend money. The most recent inflation reading showed a 0.3% increase in prices, pushing annual inflation to 2.7%, well above the Fed’s 2% target.
3. Your Savings Will Earn Less Interest
Banks typically lower the rates they pay to savers when the Fed reduces its key rate, meaning you’ll earn less interest on your money over time. Those high-yield savings accounts and certificates of deposit paying out 4% APY aren’t likely to last long after another Fed cut.
How to Prepare for the Months Ahead
Making a few key money moves can help you stay ahead of whatever comes next. Here are three things to consider:
1. Build a Strong Emergency Fund
When employment slows, an accessible emergency fund is an essential safety net. Financial experts recommend three to six months of expenses, but if you’re worried about losing your job, you might want eight to 12 months in a flexible account.
2. Lock in Today’s Highest CD Rates
While Fed rate cuts seem inevitable, you can get ahead of lower yields by locking in today’s highest rates on certificates of deposit. Right now, you can find CDs offering rates of 4% APY or higher on terms of six months or longer.
3. Get Ahead of Higher Prices
Inflation may continue climbing as businesses pass along to consumers higher costs resulting from tariffs and other economic pressures. It means your money is likely to lose some of its value every month it’s earning less than the inflation rate. Take time to audit your spending and find where costs are quietly climbing.
Conclusion
The delay in the release of the September jobs report due to the government shutdown has left many people wondering about the current state of the economy. Understanding how employment numbers are collected and revised, and how a jobs slowdown can affect you, can help you make informed decisions about your finances. By building a strong emergency fund, locking in today’s highest CD rates, and getting ahead of higher prices, you can prepare for the months ahead and stay ahead of whatever comes next.
