Government Shutdown Presenting Economic Data Limitations as Private Information Suggests Slowing Labor Market

 In the three weeks since the government shutdown, access to economic data has been limited. Many releases, most notably the employment numbers, have been inactive since the BLS closed down. With the reduced number releases and reports, the FED is having more difficulties analyzing our labor market. Due to this, we have seen the reliance on other information sources like Automatic Data Processing, Inc. (ADP) and the Institute for Supply Management’s Manufacturing and Services (ISM).

*Chicago Fed Real-Time Unemployment Rate (September 2025), source: chicagofed.org

The trend in black shows the official unemployment rate published by the BLS since 2022. However, since the BLS has not released their most recent data, the current unemployment rate is up in the air. The Chicago FED has estimated the unemployment rate based on public and private information, which they announced as about 4.34%. While this might seem accurate, this is an estimation. Without the official numbers to verify the accuracy, we are left feeling much less certain.

With the information that we do have at our disposal, we can still derive projections and make somewhat educated forecasts and interpretations. These reports have recently suggested the labor market could be slowing down and that there is an overall decrease is hirings. With this being said, the reports also suggest that these trends are very gradual, and there is no evidence of any sharp decrease that would cause extra concern.

Overall, the country is in a tight spot in the labor data department because of this shutdown. We have to estimate our current figures based on private data, which in turn makes forecasts less accurate. Because of this, economic decisions are being made based on uncertain numbers. We are experiencing trying times and I have growing concern for how our economy will behave going forward if this trend continues.

Source: https://www.marketpulse.com/markets/us-lack-of-labor-market-data-due-to-government-shutdown-investors-seek-alternative-indicators/

Shutdown impact: What it means for workers, federal programs and the economy

 

The ongoing 2025 U.S. government shutdown, which began on October 1st, has become one of the longest in history, with no end in sight. The shutdown stems from a political standoff between the Trump administration and Democrats over funding priorities. The administration is using the shutdown to cut government programs it opposes and reduce the size of federal agencies, while Democrats are demanding funding that protects Americans from losing health insurance or facing higher premiums. As a result, about 750,000 federal employees have been furloughed, while others continue working without pay. Although they are expected to receive back pay later, many are struggling financially, and food banks have begun providing extra support to affected workers.

The shutdown’s economic and social effects are severe. It costs taxpayers roughly $400 million a day in back pay for workers who are currently unable to do their jobs. The Trump administration has also announced plans to permanently eliminate thousands of federal positions, raising legal and ethical concerns after a federal judge temporarily blocked the firings. Essential services like national security and public safety continue, but many government offices and programs remain closed. As the shutdown drags on, families face growing financial stress, the economy suffers, and political divisions deepen, leaving millions of Americans uncertain about when relief will come.

Source :  https://apnews.com/article/shutdown-trump-furloughs-firings-economy-federal-workers-efced4c32282087c8c53aeab535230a0

California to Begin Selling State-branded Insulin Beginning in 2026

 

     California to Begin Selling State-branded Insulin Beginning in 2026

    Gavin Newsom, the Governor of California, announced this week that the State of California will get involved in pharma by offering state-branded insulin capped at 11 dollars per pen to California residents with diabetes beginning in 2026. Back in 2022 when Newsom first announced that California will address the high cost of insulin, it was suggested that the California could contract with Civica Rx, a non-profit drug manufacturer in Lehi, Utah, to produce and sell the state-branded insulin [for 11 dollars per pen], however, officials also suggested that state funds could be appropriated towards the development of a $50 million state-operated manufacturing plant in California. With the State of California now competing with Brand-name drug companies, people with insurance could pay even less for insulin if their insurer offers coverage of the state-branded insulin pens. 

https://apnews.com/article/california-affordable-insulin-415edd0b915677d2051d22b4b8f8121c

https://calmatters.org/health/2025/10/insulin-california-announcement/

China’s New Port Fees on U.S. Ships

China just started adding new port fees on ships that are U.S.-owned or built, while giving Chinese ships a pass. In response, the U.S. plans to add 100% tariffs on Chinese goods starting November 1.

Moves like this keep raising costs for trade between the two countries and add more tension to an already fragile relationship. It feels like every time progress is made, another issue sets things back. If this keeps going, it could start to affect prices and supply chains around the world.

Source

• https://www.reuters.com/business/autos-transportation/china-begins-charging-port-fees-us-ships-exempts-china-built-ones-2025-10-13/

Politics and Economics in Japan and France

A very informative 8-minute interview with Jordan Rochester, head of FICC Strategy EMEA at Mizuho about the impact of recent political development in Japan and France on their respective markets. Given that we have already covered France and are currently covering Japan, this episode seems particularly relevant. 

The interview is between the timestamps 8:30 and 16:15.

https://www.bloomberg.com/news/audio/2025-10-06/bloomberg-surveillance-markets-and-politics-podcast

Rethinking Value-Added Taxes for Developing Economies

The Value-Added Taxes (VAT) were first introduced in the early 1950s to help countries increase tax revenue. Since then, almost 200 countries worldwide have used this method to strengthen compliance and generate a more reliable revenue stream. However, the benefits for developed and undeveloped nations differ with VAT, and recent studies show a reassessment is critical. In undeveloped nations with rich resources, it has not been beneficial, as governments have had significant fiscal shortfalls and lost tariff revenues. This framework has caused a "resource curse" in that theory; the cost of extraction has decreased, which has then increased the reliance on unprocessed raw material exports; this is not a money-rich industry. 

This has led researchers to find that even if a tax system seems to work for one nation, the concept does not work worldwide. The VAT needs to be altered for developing countries that face budget constraints. In 2024, China stopped VAT reimbursements for 2 major raw goods, and while shipping costs rose, it created incentives to process domestically and keep them within China. 

 https://www.project-syndicate.org/commentary/how-vat-has-failed-developing-economies-by-rabah-arezki-et-al-2025-10

Buy Now Pay Later Threatening Banks

 

CNBC published an article last month on buy now, pay later loans threatening Banks. Buy now, pay later loans can be found in apps such as Klarna or Afterpay. According to eMarketer, over 85 million Americans used Buy Now, Pay Later in 2024. When someone uses Buy now, Pay Later, which allows consumers to pay in installments at no interest rate, it's a purchase that could have gone to a credit card lender or bank.

https://www.cnbc.com/2025/09/14/heres-why-banks-credit-card-companies-are-wary-of-buy-now-pay-later-loans.html