Barring a last-minute deal between Democrats and Republicans today, the government is on track to shutdown at 12:01 am. If funding for the government ends, it would temporarily suspend some, but not all, US government operations until Congress agrees to a budget to reopen the affected services.

The House previously approved a temporary spending bill, which leaves a Senate vote as the only option to keep the government open. Politico reports: “The Senate will hold a vote Tuesday on a House-passed stopgap funding bill — effectively the final off-ramp to avoid a shutdown.”

The betting site Polymarket indicates a 78% chance that a shutdown will occur. Kalshi, another betting market, reports similar odds.
 

If a government shutdown occurs, the fallout will include postponing this Friday’s payrolls report for September. The Bureau of Labor Statistics issued a notice advising that “BLS will suspend all operations,” if funding stops as of Oct. 1. “Economic data that are scheduled to be released during the lapse will not be released… The BLS website will not be updated with new content or restored in the event of a technical failure during a lapse.”

Inflation data could also be affected, depending on how long a shutdown lasts. The BLS publishes monthly updates of the Consumer Price Index (CPI) – the September report is scheduled for release on Oct. 15.

“It’s already complicated enough to interpret the labor market data. If we have a period of time where the data isn’t available, those challenges would significantly increase,” Nathan Sheets, global chief economist at Citigroup, tells CNN.

“If a shutdown happens and it lasts any significant amount of time… you could see a cascade effect where data really just gets pushed back and pushed back,” notes Gennadiy Goldberg, head of US rates strategy at TD Securities. “For markets, that’s a difficult thing given just the sheer amount of data dependence that the Fed is leaning on.”

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