Could the Government Shutdown Delay the Social Security COLA?
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The last time the flow of federal jobs data and inflation statistics halted, then-commissioner Erica Groshen remembers being holed up in the Bureau of Labor Statistics headquarters with two colleagues instead of the thousands who normally worked there.
It was October 2013. The government had just shut down due to a funding feud over the Affordable Care Act that ultimately lasted 16 days, and the trio was working the phones in an empty office.
“People were pretty surprised when they called the BLS and I answered,” Groshen, who’s now a senior economics advisor at Cornell University, tells Money.
Twelve years later, the government is shut down again over yet another Affordable Care Act feud, and that means the BLS is behind on key economic data releases. On Friday, the bureau did not publish its highly anticipated jobs report for the month of September. The next major release is the September consumer price index (inflation report), which is scheduled for Oct. 15. Many insiders are worried it could be delayed or skipped altogether.
During the last shutdown in December 2018 and January 2019, the BLS had the staff and funding to release key economic reports on time. That's not the case this time around.
The delay of economic data releases may sound like an intangible political problem, but it could have real-life consequences for everyday Americans. Aside from being the benchmark inflation indicator, the September CPI report is particularly important in determining the cost-of-living adjustment, or COLA, for 70 million Social Security recipients.
The BLS inflation reports for the months of July, August and September are required to produce the COLA, which is based on a measure called the CPI-W that accompanies each release.
If the shutdown continues through the first week of October, it will likely postpone or cancel the Oct. 15 inflation report — which will push back the COLA announcement, according to William Beach, a former BLS commissioner.
Put simply: No inflation report, no COLA news.
What we do know is that in 2013, the September CPI report was delayed by two weeks, ultimately pushing the COLA announcement for the following year back, as well — to Oct. 30. Depending on how long the 2025 shutdown is, the COLA announcement this year could be late, too.
The Social Security Administration doesn’t actually do the COLA calculation itself, says Beach, who’s now the executive director of Fiscal Lab on Capitol Hill. He says the BLS calculates the COLA and hands it off to the Social Security Administration, which then typically announces it a few hours later (after it has been certified by the Office of Management and Budget, or OMB).
Groshen adds that any time a key economic data release runs off schedule, the BLS can’t simply press publish as soon as staffers get back in the office. The off-schedule publication would need to be approved by OMB first, potentially leading to more delays.
The good news, according to Beach, is that all the inflation data needed to calculate the COLA has already been collected. It just needs to be processed.
To be clear, the government shutdown won’t affect the actual COLA for 2026, which is currently estimated to be 2.7%. Only the timing of the announcement of the COLA is up in the air. (The distribution of Social Security payments is not affected by government shutdowns anyway.)
When will we know the 2026 COLA?
If the COLA announcement is indeed delayed, staffing levels at the BLS could play a role in when we get the official number. Due to sweeping federal workforce cuts, headcount at the BLS is currently down by about 20% from previous administrations, Groshen says. So when the government does re-open, it could take the bureau a while to catch up.
Beach confirms there are even fewer people than normal in the office during the ongoing shutdown. Only acting BLS commissioner William Wiatrowski is authorized to work, and "he can’t do anything,” Beach says, like collecting data or publishing reports.
In an emailed statement to Money, Wiatrowski says, “I can confirm that I am the only BLS employee on the full-time exemption list during the lapse in appropriation.”
He adds that the bureau has “suspended data collection, processing, and dissemination” due to the shutdown and will resume normal operations once funding is restored.
When that may be is anyone’s guess. Republicans and Democrats both appear to be digging in their heels, threatening to prolong the third government shutdown under President Donald Trump.
And Social Security recipients aren't the only ones watching Washington. Aside from the COLA, the data backlog “presents a real quandary for the Federal Reserve,” Groshen says. The Fed — tasked with maintaining full employment and stable prices — cut interest rates in September for the first time in 2025.
The BLS data releases scheduled for this month were supposed to be the first pulse check on how the economy reacted to the rate reduction.
“This is when the data are most consequential,” Groshen says. “And to be flying blind, intentionally, makes it worse.”
More from Money:
6 Federal Services That Won't Be Affected by the Government Shutdown
When Social Security Recipients Will Get Their Checks in October
