A customer checks out at a supermarket in New York City on August 12, 2025.
Liao Pan | China News Service | Getty Images
The September Consumer Price Index report, due out on Friday, will draw significant attention from financial markets, even as some investors view the data with skepticism.
The Bureau of Labor Statistics has already come under scrutiny for its wide-ranging data releases this year, and the government shutdown that has hit Washington, D.C., will only heighten concerns from some on Wall Street about whether the inflation numbers tell the whole story.
“Skeptics like me will be looking at how clean this data is,” said Vishal Khanduja, head of broad market fixed income at Morgan Stanley Investment Management. “What was done if HR staff was absent? What arrangements were made before the data was reported?”
In fact, the BLS has faced many questions this year regarding its data collection methods. In August, President Donald Trump fired former BLS Secretary Erica McEnterfer, enraged by the sharp downward revision to nonfarm payrolls.
Although the BLS is still considered part of the “gold standard” U.S. economic data collection apparatus, it has also been criticized for its decidedly analog approach, including in-person visits, telephone calls, and written response forms.
Even before the closure, the agency faced additional strain from staff cuts and removed several cities from its collection efforts. With most government offices currently closed, we are compiling important inflation reports while sample data may be incomplete.
For these reasons, Khanduja believes investors need to be careful about how much weight they place on CPI numbers.
“There’s definitely going to be some skepticism on my part, and I think the market will be as well, about the validity and cleanliness of the data,” he said.
suppressed expectations
Despite questions about the data, economists aren’t looking for anything drastic in the actual numbers.
In the Dow Jones Consensus, the Consumer Price Index (CPI) report indicates an annualized inflation level of 3.1% for both the headline (all items) measure and the core excluding food and energy. Economists expect the monthly composite index to rise by 0.4% and the core index to rise by 0.3%, roughly in line with August’s growth.
What makes this report even more noteworthy is that all other data collection and release was suspended during the shutdown. The reason the Department of Labor recalled BLS employees is because the CPI report is used as an indicator for Social Security cost-of-living adjustments.
Therefore, there will be no other announcements beyond this, and investors as well as Federal Reserve policy makers will be acting blind to the data. That in itself poses many problems, creating new headaches for agencies like the BLS.
“The shutdown will likely continue into November, and it is unclear how the BLS will address the unprecedented real-time collection shortfall,” Citigroup economist Veronica Clark said in a note. “It is now increasingly likely that the November statistical collection will also be affected. We are keeping an eye on the possibility that guidance on October CPI collection will be released in Friday’s September report.”
Meanwhile, the Federal Reserve is scheduled to hold a meeting next week, and markets are widely predicting that the overnight borrowing rate will be cut by 0.5 percentage point, and that another meeting could be held in December. Federal funds interest rates currently range from 4.00% to 4.25%.
However, there is considerable uncertainty about what will happen after 2026. President Trump wants to aggressively lower interest rates, and next year he is likely to nominate a candidate to replace Chairman Jerome Powell with that philosophy.
However, the lack of data certainty will make policy development difficult.
“I don’t think we can learn much from this (CPI) data that we haven’t seen at this point,” Mike Wilson, Morgan Stanley’s chief investment officer, told CNBC on Tuesday. “I think this gives the Fed the cover to do what I think it needs to do in a more meaningful way. To me, that’s the risk, that the Fed doesn’t have the data that would allow it to cut rates in a more meaningful way.”
