Labor, Inflation Reports Poised to Break Through Data Fog After Govt. Shutdown — Evening Brief – 12.15.25 

Economic data gaps from the recent government shutdown continue to obscure the economic picture, but two major releases this week may finally offer markets a clearer view of how the fourth quarter is shaping up. The November payrolls report on Tuesday and consumer inflation data on Thursday are among the most consequential readings since the shutdown and could spark meaningful market reactions. 

In an ideal scenario, the data would show a stabilizing labor market and inflation that—if not falling—remains contained. Yet most economists expect the opposite: job growth slowing and inflation inching higher, reinforcing concerns that the economy is cooling as price pressures remain stubborn. 

The consensus forecast calls for +40,000 new jobs in November, a sharp deceleration from September’s 119,000. (October’s payrolls report will not be published due to incomplete data collection during the shutdown.) Economists are debating whether the hiring slowdown reflects weaker economic conditions, shifting immigration policy, or both. “The aging population and restrictive immigration policy are weighing on labor supply,” says Matt Nestler, senior economist at KPMG US. “The result is a much lower break-even number of payrolls each month… Expect low payroll gains.” 

Thursday’s CPI release is expected to show inflation rising to 3.1% year-over-year, up slightly from September’s 3.0%. A combination of softening labor demand, sticky inflation, and ongoing affordability pressures raises concerns that consumer spending could cool meaningfully in 2026. 

There is still a bright spot: the Atlanta Fed’s GDPNow model estimates 3.6% Q3 growth, signaling solid underlying momentum. But economists warn that Q4 remains highly uncertain—and the shutdown’s data disruptions will continue to complicate interpretation even if this week’s reports surprise to the upside.