Labor Market's Pre-Shutdown Resilience Faces a Harsh Reality Check

NEW YORK, NY – November 24, 2025 – A newly released economic index paints a picture of a U.S. labor market that was holding steady in September, a fragile moment of calm just before the nation plunged into a 43-day federal government shutdown. The Conference Board Employment Trends Index™ (ETI) ticked up to 106.84, a slight increase from an upwardly revised 106.68 in August. While the modest gain pulled the index off a post-pandemic low, it now serves as a crucial but dated benchmark, a snapshot of an economic environment that no longer exists.

When the index increases, employment is likely to grow, and its turning points often signal coming shifts in job gains or losses. However, the economic disruption that began on October 1 has cast a long shadow over this data, transforming it from a forward-looking indicator into a historical baseline against which the shutdown's true impact will be measured.

"The ETI rebounded slightly in September but it remained close to last month's reading, which was the lowest since the pandemic," said Mitchell Barnes, Economist at The Conference Board, in the original release. "Delayed employment data showed that the labor market was still healthy before the government shutdown began on October 1."

Decoding the Mixed Signals of a Tense Labor Market

Digging into the September data reveals a labor market characterized by a tense equilibrium—what Barnes termed a "low-hire, low-fire environment." The slight uptick in the headline ETI was the result of positive contributions from five of its eight components, including Job Openings and Real Manufacturing and Trade Sales. However, this was tempered by negative pressure from two components, including the Number of Employees Hired by the Temporary-Help Industry, and one component that remained flat.

This push-and-pull dynamic highlights the deep-seated uncertainty that was already present before the shutdown. For instance, the share of small firms reporting jobs they were 'not able to be filled right now' held steady at 32%, its post-pandemic low point, suggesting that hiring bottlenecks were easing but not disappearing. Simultaneously, the share of consumers reporting that 'jobs are hard to get' fell modestly to 18.2%, a slight improvement in sentiment. Yet, this cautious optimism was not enough to move the needle on broader sentiment.

"While layoffs and unemployment remain low, uncertainty persists," Barnes noted. "September's ETI reflected subdued business and consumer confidence that has not meaningfully improved."

This subdued confidence was a critical vulnerability. With hiring in the temporary-help industry—often a leading indicator for permanent employment—already showing weakness, the labor market was on unsteady ground even before the external shock of the shutdown, which has since sent confidence spiraling.

The Shutdown's Shadow and the Data Blackout

The 43-day federal government shutdown, which concluded in mid-November, did more than just furlough federal workers and rattle markets; it created a data blackout. The Congressional Budget Office (CBO) has estimated the shutdown could result in a permanent GDP loss of between $7 billion and $14 billion, while shaving up to 2.0 percentage points from annualized real GDP growth in the fourth quarter.

More critically for businesses trying to navigate the disruption, the shutdown paralyzed the government's economic data collection apparatus. The Bureau of Labor Statistics (BLS) was forced to cancel its October Employment Situation Report entirely. The September report was delayed until November 20, and the crucial Job Openings and Labor Turnover Survey (JOLTS) for September was also canceled. This has left analysts and business leaders flying blind, relying on a patchwork of private data and delayed official reports.

This disruption is precisely why the upcoming BLS employment report, now rescheduled for December 16 and expected to combine data from the shutdown period, is so highly anticipated. As Barnes concluded in his analysis of the September data, this report "may indicate negative impacts on the labor market due to the 43-day federal government shutdown and persistent economic uncertainty."

Confidence Crumbles as Uncertainty Takes Hold

That persistent uncertainty has now morphed into outright pessimism. The subdued confidence noted in September has given way to a sharp decline. The Conference Board's own Consumer Confidence Index plummeted 6.8 points in November to 88.7, its lowest reading since April. In write-in responses, consumers explicitly cited the government shutdown as a primary factor fueling their negative outlook on business conditions and the labor market.

This sentiment is mirrored on the business side. The National Federation of Independent Business (NFIB) Small Business Optimism Index dipped in October, but more telling was its Uncertainty Index, which plunged 12 points to its lowest level of the year. While labor quality remains a top concern for 27% of owners, the net percentage of owners planning to create new jobs has fallen, reflecting a growing reluctance to commit to expansion amidst the turmoil.

A Fractured View of the Economic Landscape

As the dust settles from the shutdown, emerging data points offer a fractured and often contradictory view of the labor landscape. Recent figures for the week ending November 22 showed initial jobless claims falling to 216,000, the lowest weekly figure since April. On the surface, this suggests layoffs remain low. However, a look beneath the headline reveals a more troubling trend: continuing jobless claims, which track the total number of people receiving unemployment benefits, rose to 1.96 million. This divergence indicates that while fewer people are being newly laid off, those who are unemployed are finding it increasingly difficult to secure new work.

Further complicating the picture is the persistent weakness in the industrial sector, a key engine of the supply chain economy. The Institute for Supply Management (ISM) Manufacturing PMI registered 48.2% in November, its ninth consecutive month in contraction territory. With sub-indexes for new orders and employment also contracting, it's clear that the manufacturing segment—whose performance is a core component of the ETI—is facing significant headwinds that predate and were likely exacerbated by the shutdown.

All eyes now turn to the series of delayed data releases scheduled for December. The JOLTS report on December 9 and, most importantly, the consolidated BLS Employment Situation report on December 16 will provide the first comprehensive, albeit delayed, accounting of the shutdown's economic toll. Only then will businesses and policymakers begin to understand the full extent of the damage and the true state of a labor market emerging from a period of profound disruption.