White House says government shutdown could eliminate next inflation report despite optimistic numbers
The White House has raised alarms about a potential government shutdown’s impact on the upcoming inflation report, marking a historic first where the report may not be released. The Rapid Response 47 account on X (formerly Twitter) indicated that the shutdown could prevent surveyors from gathering essential economic data, which could have severe consequences for the economy. White House press secretary Karoline Leavitt emphasized that the shutdown, blamed on Democrats’ refusal to fund the budget while pushing for healthcare benefits for undocumented immigrants, could leave businesses and markets without critical information. This situation highlights the ongoing partisan struggle in Congress, with Republicans accusing Democrats of using the shutdown as leverage, while Democrats assert that the shutdown is a result of Republican actions.
In contrast to the potential fallout from the shutdown, recent economic data has shown a slight improvement in inflation rates. The Labor Department reported that inflation rose by a better-than-expected 3% in September, up from 2.9% in August, but still lower than many economists had anticipated. Core inflation, which excludes volatile food and energy prices, also showed modest cooling, easing to 3% annually from 3.1%. President Trump took to social media to celebrate the strong stock market performance, attributing it to his economic policies, including tariffs, while investors are now speculating on a potential interest rate cut by the Federal Reserve following these inflation figures. Despite a slight uptick in gas prices due to refinery issues, economic experts like Kevin Hassett from the National Economic Council expressed optimism, suggesting that the overall inflation trend is moving in the right direction.
This complex economic landscape is further complicated by the looming government shutdown. With the inflation report potentially delayed, the Federal Reserve’s ability to make informed decisions about interest rates could be hindered, impacting everything from consumer spending to business investments. As the political stalemate continues, the administration’s focus remains on the positive economic indicators while warning about the repercussions of the shutdown. The interplay between these economic factors and the political climate will be crucial in shaping the future economic outlook for American families and businesses.
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The White House claimed Friday that the government shutdown could delay or eliminate the next inflation report, causing economic fallout.
The Rapid Response 47 account on X wrote Friday, “The White House has learned there will likely NOT be an inflation release next month for the first time in history.”
“Due to the Democrat Shutdown, surveyors cannot deploy to the field — depriving us of critical data. The economic consequences could be devastating,” the post said.
President
Donald Trump,
meanwhile, celebrated a strong stock market performance, as newly released Labor Department figures showed that inflation for the month came in at a better than expected 3%.
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That’s the highest since January and up from 2.9% in August. Excluding the volatile food and energy categories, core prices also rose 3%, down from 3.1% in the previous month. Cooler inflation data for September sent Wall Street surging Friday.
“THE STOCK MARKET IS STRONGER THAN EVER BEFORE BECAUSE OF TARIFFS!” Trump wrote on Truth Social.
It comes as investors bet on another
Federal Reserve
rate cut following the new inflation figures.
Core inflation, excluding food and energy, also eased to 0.2% monthly and 3.0% annually, showing modest cooling, while gasoline prices — the biggest driver of inflation — surged 4.1% following several months of declines.
White House press secretary Karoline Leavitt hailed the figures in a statement to Fox News Digital.
“Inflation came in below market expectations in September thanks to
President Trump’s economic agenda
,” Leavitt said.
“This is good news for American families, and it’s a shame the Democrats are using them as leverage to fund health care for illegal aliens.
Democrats choosing to keep the government closed
will likely result in no October inflation report, which will leave businesses, markets, families, and the Federal Reserve in disarray,” Leavitt said.
“Because surveyors cannot deploy to the field, the White House has learned there will likely NOT be an inflation release next month for the first time in history,” the administration added in an emailed statement to The Associated Press.
Republicans have blamed the shutdown on Democrats, arguing that they refused to fund the budget in an attempt to reinstate taxpayer-funded medical benefits for illegal immigrants through Democrat lawmakers’ continuing resolution, which would include extending the expiring Obamacare tax credits.
Democratic leadership has disputed the claims, saying that Trump and Republican lawmakers are really behind the shutdown.
The report comes as the broader economy shows steady growth but slower hiring, creating a mixed picture for consumers and markets.
Rents rose just 0.2%, the smallest yearly gain in nearly four years, while consumer prices increased 3% in September from a year earlier, the highest since January, and up from 2.9% in August.
The figures show that inflation continues to rise more slowly than many economists expected when Trump imposed sweeping tariffs in April. Economists estimate that the tariffs are adding roughly 0.4 percentage points to annual inflation.
Some of those duties were later reduced as part of trade deals, while many companies have only passed on part of the tariff cost to consumers out of concern that doing so would reduce sales. Businesses may shift more costs to consumers in the coming months if the duties appear permanent.
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The smaller increase will come as a relief to the Federal Reserve, which has signaled it will cut interest rates again next week — the second time this year — even as inflation remains above its 2% target.
Kevin Hassett, director of the National Economic Council, echoed Leavitt’s optimism, saying the latest numbers show inflation continuing to move in the right direction despite the
shutdown pause in reporting
.
“This is actually a really great report,” Hassett told Fox News. “The market is responding appropriately to good news, because 48 Bloomberg economists said this number was going to go way up. If you look at core CPI — the measure economists rely on most — it was down from August, below expectations and headed in the right direction.”
“The top-line number was slightly higher only because of a refinery shutdown in September that temporarily drove up gas prices, but those have already come down,” he said. “The next time we get a CPI release, once the government reopens, we’ll see even further reductions in inflation.”
Hassett added that the brief rise in gas prices doesn’t change the overall outlook, pointing to steady progress in cooling inflation.
“The bottom line is the markets are responding not because they think inflation is going up, but because they believe, as we know is true, that inflation is headed in the right trajectory,” he said.
The Associated Press contributed to this report.
Eric
Eric is a seasoned journalist covering US Politics news.
