This is Washington Edition, the newsletter about money, power and politics in the nation’s capital. Today, US economy reporter Julia Fanzeres looks at the shutdown’s impact on a key economic report. Sign up here. Email our editors here.
Collection Agency
We’re two weeks into the government shutdown — with no end in sight — and the impact on a key economic report may linger beyond any resolution of the standoff in Congress.
The quality of the nation’s most prominent read on inflation, the consumer price index, is already at risk. The Bureau of Labor Statistics has called back a small group of employees in a scramble to put out September’s CPI so the Social Security Administration can calculate next year’s cost-of-living adjustment for payments to beneficiaries.
But because of the shutdown, the agency hasn’t been able to gather the data needed for the October report on prices, which is due next month.
That’s because in an era of massive electronic datasets, the CPI relies heavily on old-fashioned manual labor. Nearly 60% of the index still comes from surveyors visiting or calling brick-and-mortar stores to find out what people are paying for a wide variety of goods and services from vegetables to doctor visits.
Those visits and calls take place during three 10-day collection periods each month, and they’re currently on hold with surveyors on furlough. If the shutdown continues through October, the agency will miss most or all of those windows. That means the next CPI report could be based on a fraction of the usual data, or skipped entirely if the sample is too thin to publish.
The implications go well beyond Social Security. The CPI feeds directly into the Commerce Department’s inflation measure, the personal consumption expenditures index, which the Federal Reserve uses to guide interest-rate decisions. If October’s CPI is based on thinner data, the PCE will be too, leaving Fed policymakers and investors with a murkier view of where prices are heading.
Fed Chair Jerome Powell, during a question-and-answer session after a speech today, noted the absence of official data affecting the central bank.
“If this goes on for a while,” he said, “it could become more challenging.”
Other reports, such as the jobs or retail sales, will be easier to piece together once the government reopens. But lost price checks can’t be recreated after the fact. Each day the shutdown continues makes it harder to get a clear picture of where inflation really stands. — Julia Fanzeres
President Donald Trump suggested the $20 billion lifeline the US has provided Buenos Aires could be contingent on Argentine President Javier Milei’s success in the midterm elections.
Powell signaled the central bank may stop shrinking its balance sheet in the coming months, an important shift necessary to preserve liquidity in overnight funding markets.
Jerome Powell, Chairman of the US Federal Reserve, speaks during the National Association of Business Economics annual meeting in Philadelphia on Oct. 14.
Photographer: Hannah Beier/Bloomberg
Several news organizations including Bloomberg News, the New York Times and the Wall Street Journal refused to sign new reporting limits set out by Defense Secretary Pete Hegseth’s Pentagon.
Trump soaked in praise and outlined a vision for broader Middle East peace as he stopped in Israel and Egypt to mark the success of US-led mediation efforts to end fighting in Gaza. Now comes the even harder part.
The president said a strike on a drug boat off the coast of Venezuela this morning killed six alleged traffickers in the latest US attack on groups the administration blames for American overdose deaths.
US Trade Representative Jamieson Greer predicted that heightened tensions with China over export controls would ease, following talks between representatives from the world’s two largest economies.
The Supreme Court is poised to consider further cutting a landmark 1965 civil rights law with a case that could call into question as many as 19 congressional districts with primarily Black or Hispanic populations.
Judges appointed by President Ronald Reagan are emerging as vocal critics of the Trump administration’s efforts to circumvent court orders or challenge the law in unprecedented ways.
The Supreme Court denied conspiracy theorist Alex Jones’ request to review a nearly $1.4 billion defamation judgment against him stemming from his false claims that the 2012 Sandy Hook school shooting was a hoax.
Sentiment among small businesses in the US fell in September to a three-month low on less optimism about the economic outlook and greater concern about excess inventory.
The International Monetary Fund warned that the global economy is showing signs of strains from sweeping US tariffs and protectionism — even though it so far has held up better than expected.
The Trump administration is inviting all US colleges to participate in a compact that would grant preferential federal funding in return for commitments to specific policy changes like DEI bans.
Border Patrol agents who normally police the Mexican frontier are being sent into densely populated urban neighborhoods — sometimes with military-style tactics that lead to violent confrontations.
The chairman of Cambodian conglomerate Prince Group was charged by US prosecutors with running a “sprawling cyber fraud empire” that led to the seizure of Bitcoin worth about $15 billion.
Watch & Listen
Bloomberg Television’s Balance of Power early edition at 1 p.m. focused on Trump’s meeting with Argentina’s Milei as well as Powell’s speech. On the program at 5 p.m., hosts Joe Mathieu and Julie Fine interview Democratic Senator Elizabeth Warren about the US extending a $20 billion lifeline to Argentina and the government shutdown. They also talk with Danny Danon, Israel’s ambassador to the UN.
On the Big Take podcast, Bloomberg’s Josh Wingrove talks with host Sarah Holder about his visit with Kentucky Governor Andy Beshear, a Democrat leading a red state, to understand the economic consequences of Trump’s tariffs on Kentucky’s manufacturing industry – and its iconic bourbon. Listen on iHeart, Apple Podcasts and Spotify.
Chart of the Day
Americans’ views of several high-profile federal agencies have slid to new lows. A recently released Gallup survey — conducted before the Oct. 1 shutdown — shows fewer US adults giving “excellent” or “good” ratings to agencies like the Centers for Disease Control, the Central Intelligence Agency, Food and Drug Administration, Federal Emergency Management Agency and Internal Revenue Service. One exception: the Department of Homeland Security, which rebounded 10 points from its all-time low last year. But it’s also the most politically polarizing department, with 73% of Republicans approving but only 14% of Democrats. — Gregory Korte
What’s Next
The Fed’s Beige Book survey of regional businesses will be released tomorrow.
The National Association of Home Builders housing market index will be published Thursday.
Trump is scheduled to meet with Ukrainian President Volodymyr Zelenskiy Friday at the White House.
Existing home sales for September will be reported by the National Association of Realtors on Oct. 23.
The University of Michigan’s final read of consumer sentiment for the month will be released Oct. 24.
The Federal Reserve’s rate-setting committee meets Oct. 28-29.
The Asia-Pacific Economic Cooperation leaders summit opens Oct. 31.
Seen Elsewhere
Drug traffickers are shifting tactics to move their illicit products since the US military began targeting their boats in the Caribbean, including using cargo ships and planes, the New York Times reports.
An investment fund run by Trump allies sought sponsors for a conference it pitched as a US Treasury summit on AI even though it wasn’t a government-hosted event, according to the Wall Street Journal.
A man who broke into the Pennsylvania governor’s mansion and ignited a fire with Molotov cocktails pleaded guilty to the attempted murder of Governor Josh Shapiro and other charges, the Associated Press reports.
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