As if the Federal Reserve's job isn't complicated enough, the shutdown in Washington, D.C., is about to make things worse. The government ceased operations at midnight , meaning government economic reports, including the nonfarm payrolls report due out Friday, will not be released. Fed officials essentially will lose access to some of the most important tools they use to figure out their next moves on monetary policy. With their next meeting just four weeks away, the timing is not good. "For the Fed, the absence of timely labor market data would add a layer of complexity to decision-making at a particularly sensitive moment," said Lydia Boussour, senior economist at EY-Parthenon. With the Fed inherently data dependent, not getting the kind of information policymakers rely on makes the job of deciding where interest rates should be set more complicated. The Bureau of Labor Statistics' September jobs report will be the first test. It is generally considered the last word on the labor market. Labor Department officials have said economic data will neither be collected nor released as long as the shutdown continues. Fed officials, then, will have to look elsewhere, making reports like Wednesday's private payrolls count from ADP considerably more important. As an organization not funded by Congress, the Fed is not impacted by the shutdown. "There is a range of other kinds of data we also look at to try to understand labor markets, and we are exploring other ways of doing that," Boston Fed President Susan Collins said at a conference talk Tuesday in New York moderated by CNBC's Seema Mody. "Many of those are actually grounded in BLS data. So not having the BLS data over time can become problematic." Markets are widely expecting the Fed to approve quarter percentage point rate cuts at its October and December meetings, but the uncertainty surrounding which data policymakers will use could cause added confusion. If "markets are forced to monitor the economy using soft data reports like consumer confidence, investors will literally be flying blind in trying to assess the strength of business and economic conditions," said Chris Rupkey, chief economist at FWDBonds. "Fed officials need to get ready for the uncertainty and bring in more boxes of darts to throw at the dart board because real economic data releases are about to go dark." ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
