Featured Analysis - US

On November 12, 2025, US President Trump signed a bill ending the longest government shutdown in US history. As the government reopens, there may be hopes of data clarity and visibility into the US economy that has eluded us for the past month. Unfortunately, we anticipate ongoing challenges with obtaining a clean read – we think Q4 data will likely add more confusion than clarity. Because of this, our strategy is to focus on the broader trends in play, which include persistent inflation and slower growth in 2026.

Moreover, the data releases for the remainder of 2025 will not follow the current published calendar. We will publish an updated calendar once it is formally made available to the public by statistical agencies. Additionally, we will be delaying the release of our US Week Ahead until we have more clarity on the changes to the data release schedule.

In the meantime, here are our key indicators of focus:

Labor market data – private sector stabilization overshadowed by shutdown swings

Here’s what we know:

• We expect the September employment report will be released in short order. It was originally set to be released Oct 3rd (two days after the shutdown commenced), and the data was already collected and processed. The September data will be stale but will provide a reliable starting point from which we will assess the trajectory of the labor market in Q4.

• October data will be impacted by the shutdown (if we do get October’s report), but since federal employees are returning to work during the current reference week, they should be captured in November payrolls and won’t add to the u-rate. Still, the broader household survey (used to calculate the u-rate) is behind schedule in November and will be a critical data point ahead of the Fed’s meeting in December.

• While we have not been receiving weekly jobless claims data from the Department of Labor, state-level data has pointed to stabilizing initial jobless claims over the past five weeks. This is aligned with what we have seen in both weekly and monthly reports from ADP as well.

Here’s what we are worried about:

• We do not know if the October NFP data will be released, and if it is, the reality we face is that it will be significantly distorted by the government shutdown. If the NFP data is released, we expect to see close to 1.5 million jobs shed in the month of October as federal employees were not paid and therefore not on payrolls.

• The unemployment rate matters the most to the Fed – and this datapoint may not be released for October. If the household survey is released – and this is ambiguous since the data was not collected – we estimate it would spike to 4.8% in October, since furloughed and essential employees would be counted as unemployed (“on temporary leave”).

Here’s what we think will be most important:

• We think the unemployment rate is the most useful labor indicator, as the debate around the breakeven rate of payroll growth continues. Outside of the impact of the government shutdown, we expect that the US economy likely added ~30K jobs in October, which is consistent with our estimate of the breakeven pace of employment growth.

• After netting out federal employment we expect to see a labor market that is stabilizing amidst a low-hiring, low-firing backdrop. We look for the bulk of job creation to continue in health care. We’re also monitoring leisure and hospitality hiring as a proxy for discretionary spending by upper income households.

• We’ll also watch the number of retired workers who applied for Social Security benefits – this cohort will subtract from payrolls but will not add to the unemployment rate.

Visibility on inflation is particularly bad

Here’s what we know:

• We know that CPI data was not collected in the month of October. Roughly two-thirds of price data feeding into the CPI measure is collected by in-person visits to brick-and-mortar stores. In November, the collection process has been idle for nearly 2 weeks and risks collection issues as we approach a busy holiday season.

• PPI data was also not collected in October. The lack of CPI and PPI data will mean PCE data is also unavailable for the month of October, since most of the basket (~90% on net) is constructed from CPI and PPI inputs.

Here’s what we are worried about:

• Unlike the labor market, there are few (if any) reliable alternatives to the CPI report. We are reliant on the BLS price data to provide insights into inflationary pressures, and absent the CPI and PPI reports, it’s hard to gauge inflation’s trajectory. 

• The October CPI report (if released) will pose a serious data quality issue. The reality is we will get either an October report that is imputed OR the report may be canceled altogether. This will create ripple effects for data in November.

• There is also a very real possibility that the November data will have a higher share of imputation than usual, since we are mid-way through the month and BLS workers have not been collecting data.

Here’s what we think will be most important:

• The September CPI print was a downside surprise, but much of this can be attributed to a cooler OER print, which was likely a one-off.

• To-date we have started to see early signs of tariff pressures building in some trade-exposed sectors (for example, in apparel, home furnishings, and motor vehicle parts and equipment).

• Still, other trade-exposed sectors (specifically, new motor vehicles) have yet to see pressures emerge. We expect that the inventory buildup in combination with companies aiming to maintain market share during the holiday shopping season will mean that we do not see a material pass-through to consumer prices until 2026.

Don’t pay attention to Q4 GDP distortions – look to 2026 for a cleaner read of growth

Here’s what we know:

• The Q4 GDP report is not scheduled for release until Jan 30, 2026. But GDP estimates require a significant amount of input from other data sources, including retail sales, durable goods, and inflation reports. We could see the release delayed because of delays elsewhere in the data production process.

• The relative strength seen in GDP growth in 2025 has not been consistent with other economic indicators, including job growth, consumer sentiment, and trade/inventory swings. If there are missing months of data (i.e., October), this will add to distortions that occurred earlier in the year due to tariff front-running.

Here’s what we are worried about:

• We expect the government shutdown will weigh on Q4 GDP growth. This will be captured in both government and consumer spending. Government contracts were not paid during the month of October and furloughed federal employees missing paychecks are likely to pare back consumption.

• Combined, we expect both factors to shave a few tenths of a percentage point off Q4 GDP. Still, some of the drag will be added back in Q1 2026, adding more noise to the equation.

Here’s what we think will be most important:

• Once we get past the ripple effects of the shutdown, we expect to have more clarity on both sides of the Fed’s mandate in early Q1. But GDP growth won’t be timely – we likely won’t have a clean read until Q2 2026 data is released in July.

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About the Authors

Mike Reid is a Senior U.S. Economist at RBC. He is responsible for generating RBC’s U.S. economic outlook, providing commentary on macro indicators, and producing written analysis around the economic backdrop.

Carrie Freestone is an economist and a member of the macroeconomic analysis group. She is responsible for examining key economic trends including consumer spending, labour markets, GDP, and inflation.

Imri Haggin is an economist at RBC Capital Markets, where he focuses on thematic research. His prior work has centered on consumer credit dynamics and treasury modeling, with an emphasis on leveraging data to understand behavior.