BLS Data Halts, But Chicago Fed Sees Steady 4.34% Unemployment: Private Sources Flag 'Low Fire, Low Hire' Holiday Risk

As the U.S. government shutdown suspends Bureau of Labor Statistics (BLS) data releases, including the critical September jobs report scheduled for Friday, the Chicago Fed has stepped in with a final real-time forecast, predicting a steady unemployment rate of 4.34% for September 2025, based on 11 job market indicators.

However, private data sources paint a concerning picture, signaling a “low fire, low hire, low gear” labor market with weak holiday hiring plans that could impact payrolls through year-end.

Chicago Fed Sees Steady 4.34% Unemployment

Chicago Fed President Austan Goolsbee highlighted the urgency of the forecast, noting, "It doesn't look like we'll get official BLS jobs data this week," emphasizing the reliance on real-time data amid the shutdown.

The Fed's analysis, released late Thursday, shows the unemployment rate unchanged from August, with layoffs at 2.10% and hiring rates for unemployed workers at 45.22%, both slightly down from the prior month.

The forecast details include a 28.2% probability of no change in the BLS-reported rate, per the final model.

See Also: Jobs Shock: Biggest Loss In Over 2 Years And Fed May Cut Again

Private Sources Warn Of A Cooling Labor Market

Contrastingly, insights from Bill Adams, Chief Economist at Comerica Bank, who has synthesized information from multiple private sources, including Revelio Labs, Challenger, Gray & Christmas, and the Cleveland Fed’s WARN Act data, suggest a cooling market.

According to him, “The alternative data sources imply that the U.S. job market is still in a low hire, low fire, low gear mode.” Adams warns, "Layoffs still low, but weak holiday hiring plans suggest a seasonal headwind to payrolls through year-end.”

Three private sources corroborate this: Revelio Labs estimates 60,100 jobs added in September, outpacing ADP's 32,000 decline, yet hiring intentions plummeted 70% year-over-year, per Challenger, Gray & Christmas. The Cleveland Fed's WARN Act index also dropped 22% to 14,000, indicating minimal planned layoffs.

Is AI Eating Up The Jobs?

Adams pointed to broader economic pressures, noting, "Consumer confidence is low, tariffs are pressuring margins, and the auto industry is bracing for a drop in sales now that EV subsidies have expired."

He added that AI-driven growth, while boosting GDP, is capital-intensive and creates fewer jobs, potentially widening the gap between economic output and employment. The shutdown, historically shaving 0.1-0.2% off GDP growth weekly, could exacerbate this, with Comerica forecasting a 0.25% Fed rate cut in late October.

As the labor market teeters, economists await resolution of the shutdown, with alternative data offering a mixed but cautious outlook for the holiday season.

Price Action

The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Thursday. The SPY was up 0.12% at $669.22, while the QQQ rose 0.41% to $605.73, according to Benzinga Pro data.

The futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were higher on Friday.

Read Next:

• Recession Odds ‘Not At 0%,’ Says Economist As Small And Medium Businesses Drive Job Losses In ADP Report Amid BLS Shutdown

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Shutterstock/ Photobyphotoboy