During the previous disruption in the flow of federal jobs data and inflation statistics, then-commissioner Erica Groshen recalls being isolated at the Bureau of Labor Statistics headquarters alongside two colleagues, rather than the usual bustling staff. This scenario unfolded in October 2013, amid a government shutdown stemming from a funding dispute over the Affordable Care Act that ultimately extended for 16 days. The trio found themselves answering calls in an eerily quiet office.
Fast forward twelve years, and the government faces another shutdown linked to ongoing tensions surrounding the Affordable Care Act. This current situation means that the BLS is unable to release critical economic data on schedule. Just last Friday, the bureau failed to publish its eagerly awaited jobs report for September. The next significant release, the September consumer price index (CPI) report, is slated for October 15. However, many experts express concerns that this report could either be delayed or entirely omitted.
In contrast to the previous shutdown in December 2018 and January 2019, when the BLS had adequate staffing and funding to issue crucial economic reports punctually, the current situation is markedly different. The ongoing shutdown has left the bureau struggling with limited resources, thereby affecting its ability to provide timely data.
The postponement of economic data releases may seem like a distant political issue, yet it carries significant implications for the daily lives of Americans. Among these is the critical role of the September CPI report, as it serves as a key benchmark for determining the cost-of-living adjustment (COLA) for approximately 70 million Social Security recipients. The reports for the months of July, August, and September are essential to calculating the COLA, which relies on a specific measure known as the CPI-W that accompanies each report.
If the shutdown persists into the first week of October, it is likely to delay or even cancel the October 15 inflation report. This would subsequently defer the announcement of the COLA, according to William Beach, a former BLS commissioner. In essence, a lack of an inflation report equates to no updates regarding the COLA.
Historically, during the 2013 shutdown, the September CPI report experienced a two-week delay, which also postponed the COLA announcement for the following year until October 30. Depending on the duration of the current shutdown, this year’s COLA announcement may face similar delays.
It is vital to note that the Social Security Administration does not conduct the COLA calculations directly. Beach, who now serves as the executive director of Fiscal Lab on Capitol Hill, explains that the BLS is responsible for calculating the COLA and subsequently hands this information to the Social Security Administration, which typically announces it shortly thereafter, once certified by the Office of Management and Budget (OMB).
Groshen points out that whenever key economic data releases fall behind schedule, the BLS cannot simply publish the data as soon as the staff returns to the office. Any off-schedule publication necessitates OMB approval, which could lead to further delays in releasing critical economic information.
Despite these challenges, Beach reassures that all necessary inflation data for calculating the COLA has already been gathered; it merely requires processing. To clarify, the current government shutdown will not influence the actual COLA for 2026, which is presently estimated at 2.7%. The uncertainty lies solely in the timing of the announcement for the COLA. Furthermore, the distribution of Social Security payments remains unaffected by government shutdowns.
When will we receive the official announcement for the 2026 COLA?
Should the announcement regarding the COLA face delays, the current staffing levels at the BLS could significantly impact when the official figure is revealed. Due to extensive federal workforce reductions, the BLS workforce has diminished by approximately 20% compared to previous administrations, as noted by Groshen. Consequently, when the government reopens, it may take the bureau additional time to catch up on its backlog.
Beach corroborates that the current shutdown has resulted in even fewer staff members being present in the office. Currently, only acting BLS commissioner William Wiatrowski is permitted to work, but as Beach points out, “he can’t do anything,” such as collecting data or publishing essential reports.
In a statement sent to Money, Wiatrowski confirmed, “I can verify that I am the only BLS employee on the full-time exemption list during the lapse in appropriation.” He further stated that the bureau has “suspended data collection, processing, and dissemination” due to the shutdown and will resume its standard operations once funding is restored.
As for when that restoration might occur, it remains uncertain. Both Republicans and Democrats seem entrenched in their positions, which threatens to prolong this latest government shutdown under President Donald Trump.
Moreover, Social Security recipients are not the only demographic monitoring developments in Washington. In addition to the COLA, the data backlog poses significant challenges for the Federal Reserve. Groshen emphasizes the importance of this data, as the Fed is tasked with ensuring full employment and maintaining stable prices. The Fed notably cut interest rates in September for the first time in 2025.
The scheduled BLS data releases for this month were intended to serve as the initial indicators of how the economy responded to the recent rate cut. Groshen asserts, “This is when the data are most consequential. To be flying blind, intentionally, exacerbates the situation.”
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