A partial government shutdown has paused many federal data releases, but two key reports on housing and inflation are still on deck. The Bureau of Labor Statistics (BLS) will publish September’s Consumer Price Index on Friday, October 24, a one-off release made possible by recalling staff so Social Security can calculate cost-of-living adjustments. Most other BLS updates remain on hold until funding resumes.
Inflation: Near 3%, Services Cooling (a Bit)
The August CPI report (the latest available) showed headline inflation up 2.9% year-over-year and core inflation (excluding food and energy) up 3.1%. Within services, the closely watched “services less energy” category ran 3.6% year-over-year in August – down from earlier peaks. Food prices rose 3.2% while energy stayed roughly flat (+0.4%).
These numbers put inflation “near 3%” – still above the Fed’s 2% target. We’ll see on October 24 whether September moved closer to that target or drifted further away.
Labor Market: Private Indicators Point Softer
Before the data blackout, the BLS diffusion index for August (the last published reading) fell slightly below 50, meaning more than half of industries were cutting jobs. With the official jobs report delayed, private data are driving the conversation. ADP reported a loss of 32,000 private-sector jobs in September, and Indeed’s job postings show continued cooling through late September.
Fed Governor Christopher Waller captured the moment last week: “Something’s gotta give – either economic growth softens to match a soft labor market, or the labor market rebounds to match stronger economic growth.” He signaled openness to additional rate cuts depending on incoming data.
Real wages tell a sobering story: month-over-month real earnings dipped 0.1% in August and are roughly flat (up just 0.7%) from a year ago.
Housing: Home Sales This Week; Rents Are Cooling
Existing-home sales data from the National Association of Realtors arrives Thursday, Oct. 23. These September closings largely reflect contracts signed in August, when 30-year mortgage rates dipped 15–20 basis points versus late July. Mortgage rates dropped more sharply in September after the Fed’s rate cut, so any significant demand pop is more likely to show up in October and November closings.
Fresh Zillow rental data released last week showed notable cooling:
Record concessions: 37.3% of listings offered deals – the highest for any September.Slowing rent growth: Multifamily rents rose just 1.7% year-over-year (second-lowest since 2021); single-family rents rose 3.2%, the slowest in Zillow’s records.Sun Belt declines: Year-over-year apartment rents fell in Austin (–4.7%), Denver (–3.4%), San Antonio (–2.3%), Phoenix (–2.2%), and Orlando (–0.8%).
Bottom Line
Historically, sustained labor market strength drives rising housing consumption. Today’s frozen labor market, homebuilding pullbacks amid rental market softness, and subdued sales all point to late-cycle dynamics taking hold.
Moody’s Analytics estimates the probability of a U.S. recession in the next 12 months at roughly 48% (as of mid-September 2025) – essentially a coin toss.
The Federal Reserve is expected to cut again at its next meeting.
Economic expansions rarely die of old age. They’re usually killed by policy mistakes, external shocks, or imbalances that build over time. The question now: which will it be?
