1. Labor Department may halt economic data amid shutdown. 2. This week, key economic reports are expected before the shutdown. 3. Job growth slowdown complicates the upcoming nonfarm payroll report. 4. CPI report on inflation critical before Fed's October meeting. 5. Shutdown could affect active data collection and delay future reports.
A government shutdown creates uncertainty, which typically depresses market performance as investors react negatively to the potential halt of crucial economic data. Historical shutdowns, such as in 2013 and 2018, saw significant market declines as investors feared monetary policy inaction due to lack of data.
The disruption of key economic data is highly relevant as it informs the Federal Reserve's monetary policy decisions, thus directly affecting market sentiment and stock behaviors, especially in a leading index like the S&P 500.
The immediate impact will likely be felt in the short term as the market digests the halt in essential economic indicators, with potential recovery post-shutdown if data resumes normal activity.