US Hiring Cools as Federal Shutdown Halts Key Labor Data

With official labor reports suspended during the shutdown, private data shows hiring slowing and layoffs staying high.

October 7, 2025

The federal shutdown has paused official employment data releases, leaving businesses and policymakers dependent on private reports showing a cooling job market.
ADP, Intuit, and Challenger data reveal weaker hiring, small-business job losses, and nearly 950,000 layoffs announced so far in 2025.
Without official Bureau of Labor Statistics (BLS) or inflation data, the Federal Reserve may delay future rate decisions until government reporting resumes.

Key Takeaways

A Data Blackout for the Job Market

According to GlobeSt, with the US government shutdown halting the Bureau of Labor Statistics’ monthly Employment Situation report, the economy is effectively flying blind. Employers and investors are left to interpret limited private-sector data, most of which signal that hiring has slowed and layoffs remain widespread.

Private Indicators Signal Softening

The Chicago Federal Reserve’s real-time labor tracker estimates unemployment rose to 4.34% in September, up from 4.09% a year earlier.

Payroll processor ADP reported that US companies cut 32,000 jobs in September, revising August’s gains to a slight decline. “The hiring momentum has slowed,” said ADP Chief Economist Nela Richardson, though she cautioned that ADP’s numbers don’t directly mirror the official BLS data.

Manufacturing also continues to cool. The ISM Manufacturing PMI showed little change last month, with activity contracting modestly, according to Comerica Bank Chief Economist Bill Adams.

Small Businesses and Layoffs Feel the Strain

Small firms—those with fewer than 10 employees—cut 48,000 jobs in September, a 0.37% decline, according to Intuit. Employment among these businesses averaged 400,000 fewer positions in the third quarter compared to their recent peak.

Meanwhile, layoff announcements totaled 54,064 in September, down from August’s spike but still contributing to a year-to-date total of 946,426—the highest level since 2020, Challenger, Gray & Christmas reported. Planned hiring has plunged nearly 60% from 2024, marking the weakest September since 2009.

While the Federal Reserve remains operational, it lacks access to key employment and inflation metrics, including Personal Consumption Expenditures (PCE) data. Without those figures, analysts expect the central bank to pause new rate decisions until the government resumes normal operations.

ManpowerGroup’s latest data aligns with that caution: hiring demand has dropped to its lowest level since late 2022, signaling that both employers and policymakers are in a holding pattern until Washington’s data flow returns.