Market update - October 3rd, 2025
2 min read
- Data
U.S. Shutdown: into the unknown
The Department of Labor has made clear that during a shutdown the Bureau of Labor Statistics (BLS) halts data collection, processing, and publication of economic reports. Analysts and financial institutions are already flagging the scheduled October 3rd jobs report as a likely casualty of the funding lapse. There’s precedent too: in previous shutdowns, economic data simply didn’t get released until Washington reopened the taps.
A look at previous shutdowns
The clearest example was October 2013, when the government shut down for 16 days. The September payrolls report, which should have been released the first Friday of October, was delayed more than two weeks and only published once the shutdown ended on October 22. Later shutdowns played out differently. In 2018–2019, the longest in U.S. history at 35 days, many data releases were disrupted—but because BLS was separately funded, payrolls still came out on schedule.
That 2013 period was not without cost. The White House Council of Economic Advisers estimated private-sector job creation was cut by about 120,000 in just the first two weeks, shaving roughly 0.25 percentage points from Q4 GDP. Markets reflected the stress:
The S&P 500 lost about 5.2 percent from its September peak to a shutdown low before staging a partial recovery.
Uncertainty spiked as investors worried about fiscal dysfunction, though some saw it as a buying opportunity.
Yields showed unease, as the shutdown tied into debt ceiling brinkmanship and raised questions about U.S. creditworthiness.
Both businesses and consumers pulled back amid the fog. Studies later showed spending contracted disproportionately when household incomes were disrupted by the funding lapse.
Markets bet on a new rate cut
Fast forward to today. The shutdown risks leaving policymakers flying blind on employment at a moment when the jobs picture is already messy. An absent payrolls report could allow the Fed to downplay or sidestep labor market weakness, citing the shutdown itself as the reason for any cracks. Markets are already twitchy: futures swung dramatically dovish after ADP payrolls badly missed expectations (–32 versus +50 forecast), and pricing now points to a high probability of an October rate cut.
As for timing, Polymarket bettors aren’t optimistic. They see the most likely resolution landing on or after October 15th, with probabilities shifting further out rather than earlier. In the meantime, the vacuum is falling neatly into the hands of diversifiers like gold and bitcoin,assets that thrive when U.S. credit quality and financial-system resilience are called into question. This week has seen a huge resurgence in interest in Bitcoin and Ethereum, seeing US$2.58B and US$1.27B respectively.
