Despite the ongoing government shutdown, the U.S. Bureau of Labor Statistics is set to release the crucial September Consumer Price Index (CPI) report on October 24, 2025. This pivotal release is essential for calculating the 2026 Social Security cost-of-living adjustment (COLA) for millions of Americans. While a temporary reprieve from the economic data blackout, concerns are mounting among economists and investors regarding the reliability of future CPI reports due to suspended data collection, potentially impacting Federal Reserve policy and market stability.
The U.S. Bureau of Labor Statistics (BLS) has announced a critical move amidst the ongoing government shutdown: the release of September’s Consumer Price Index (CPI) report on October 24, 2025. This decision, driven by statutory obligations, aims to assist the Social Security Administration (SSA) in determining the annual cost-of-living adjustment (COLA) for 2026. This is a significant development for millions of retirees and other beneficiaries who rely on these payments.
While this particular data point offers a brief window into the nation’s economic health, the larger picture remains clouded. The BLS has confirmed that the collection, processing, and publishing of other official economic data remain suspended until regular government operations resume. This includes the highly anticipated September employment report, which was due last Friday.
Understanding Social Security’s COLA: A Lifeline for Millions
The COLA is a vital mechanism designed to help Social Security and Supplemental Security Income (SSI) benefits keep pace with inflation. It directly impacts older Americans, the disabled, and certain widows, widowers, and children. The calculation for the 2026 COLA specifically utilizes the CPI for Urban Wage Earners and Clerical Workers (CPI-W) data, comparing the third quarter of 2024 to the third quarter of 2025. This widely anticipated announcement, typically made in October, provides crucial financial clarity for households across the country.
Historically, these adjustments have been instrumental in maintaining the purchasing power of benefits. In 2025, more than 72.5 million Social Security and SSI beneficiaries received a 2.5% COLA increase. Looking ahead, The Senior Citizens League, a prominent seniors’ advocacy group, projected a 2.7% COLA raise for 2026. This would translate to an average monthly benefit increase of $54 for retirees, lifting it from $2,008 to $2,062. Detailed information on how COLA is determined can be found on the Social Security Administration website.
The Shadow of the Shutdown: A Broader Economic Data Blackout
The government shutdown, which commenced on October 1 after funding lapsed, has created a significant data void. Beyond the CPI, other critical economic indicators, typically relied upon by analysts, businesses, and policymakers, are currently unavailable. This blackout period injects considerable uncertainty into market analyses and strategic planning.
The delay of September’s employment report, a key gauge of labor market health, is particularly impactful. While the immediate focus is on ensuring Social Security benefits are accurately adjusted, the broader suspension of data collection paints a concerning picture for the clarity of the economic landscape in the coming months. The BLS stated that “this release allows the Social Security Administration to meet statutory deadlines necessary to ensure the accurate and timely payment of benefits,” highlighting the exceptional nature of this particular data release.
CPI Data Quality Under Scrutiny: What Investors Need to Know
While the September CPI report will be released, concerns are already mounting about the integrity and accuracy of subsequent inflation data, particularly for October, November, and December. Consumer prices are collected throughout the month, and with the shutdown in effect for a portion of October, approximately one-third of that month’s data is already missing.
Economists are sounding the alarm regarding potential distortions. Veronica Clark, an economist at Citigroup, warned, “As prices rise on average, collecting prices only at the end of October may result in a higher average than if prices were collected throughout the whole month. This implies a larger change relative to average September prices. But it also means prices at the end of October would be more similar to average prices in November, implying a smaller change in November.” This sentiment is echoed by past events; during the 2013 government shutdown, only about 75% of CPI data was collected in October, and economists anticipate a similar scenario this year. Further details on CPI collection methodology are available from the Bureau of Labor Statistics.
Adding to these concerns, the BLS is already grappling with existing resource constraints due to budget and staffing cuts. These limitations have led to the suspension of data collection for certain portions of the CPI basket in various areas nationwide. Michael Gapen, chief U.S. economist at Morgan Stanley, noted that while “assuming that November data are collected, the December price levels in the CPI would be no less accurate than they usually are,” investors should still expect a “long wait for clean CPI data,” with the December CPI not expected until mid-January.
Federal Reserve’s Dilemma: Navigating Policy with Imperfect Data
The rescheduled CPI report’s timing, just before the Federal Reserve’s policy meeting on October 28-29, puts the central bank in a challenging position. The Fed is widely expected to deliver another 25 basis points interest rate cut at this meeting, continuing its easing policy that began last month, which saw its benchmark overnight interest rate reduced to the 4.00%-4.25% range to aid the labor market.
However, the potential for distorted CPI data complicates the Fed’s assessment of inflationary pressures. These distortions could also impact the quality of the Personal Consumption Expenditures (PCE) Price Index, which is the Fed’s preferred inflation gauge for its 2% target. Reliable data is paramount for informed monetary policy decisions, and any significant inaccuracies could lead to missteps in addressing the economic climate.
Beyond CPI: The Unscathed Employment Report and Investor Sentiment
While the quality of inflation data is a major concern, economists believe the employment report may fare better. Michael Gapen of Morgan Stanley explained that “the payroll data reflect employment in the pay period that includes the 12th of the month, and so they might seem to be affected by the current shutdown, which is now approaching that time. However, the establishments in the establishment survey will retain their information about who was employed over that period. The BLS may collect and tabulate it later, but the underlying employment information is unharmed.” This suggests that while release may be delayed, the core data for nonfarm payrolls could remain robust, potentially even improving the quality of estimates by allowing for more thorough processing once operations resume.
Investors will undoubtedly welcome any reprieve from the economic data blackout. However, the prevailing sentiment is one of caution, as the lack of comprehensive and reliable data makes it difficult to ascertain the true state of the economy. This uncertainty often translates to increased market volatility, underscoring the need for a long-term investment perspective and reliance on fundamental analysis rather than short-term data fluctuations.
Long-Term Investment Perspective: Navigating Economic Uncertainty
For the informed investor, the current economic climate, marked by government shutdowns and data uncertainties, presents both challenges and opportunities. While the immediate focus is on the CPI and COLA adjustments, a broader view is essential.
Key Considerations for Investors:
- Focus on Fundamentals: In times of data volatility, revert to the fundamentals of companies and sectors. Strong balance sheets, consistent earnings, and robust business models become even more critical indicators of resilience.
- Patience and Discipline: Short-term data distortions can lead to irrational market movements. Maintaining a disciplined, long-term investment strategy is crucial to avoid reacting to potentially misleading information.
- Diversification: A well-diversified portfolio can help mitigate risks associated with sector-specific or market-wide uncertainties arising from data gaps.
- Monitor Official Sources: Continue to track official announcements from the BLS, SSA, and the Federal Reserve. While data may be imperfect, official statements provide the most authoritative updates on economic conditions and policy directions.
- Historical Context: Remember that the economy has navigated similar challenges, such as past government shutdowns. Learning from historical responses can provide valuable perspective on potential recovery paths and market behavior.
The release of the September CPI report is a testament to the essential functions of government agencies, even under duress. However, its isolated nature within a broader data drought demands a nuanced understanding from investors. By prioritizing long-term strategy, fundamental analysis, and critically evaluating available information, investors can better navigate the current economic uncertainties and position themselves for sustained success.
