Not employment report Friday

Daily update

Today is US employment report Friday—except it is not, because of the impenetrable fog of US government shutdown. As low fear of unemployment is a crucial line of defense keeping the US from recession, this is frustrating.
There are a range of forecasts about the economic cost of the shutdown (not helped by the US Council of Economic Advisers seemingly failing to adjust for annualization). Shutdowns usually redistribute economic activity between time periods—what is lost today is paid back tomorrow. There are some costs (closed national parks tend not to get economic payback). However, this benign position depends on government employees getting back-pay. If employees are fired rather than furloughed, what is lost today is not paid back tomorrow and growth is more seriously hurt.
Current French Prime Minister Lecornu holds talks with legislators about the budget. Market optimism about the outcome is contained. ECB President Lagarde is speaking again. Market enthusiasm about the remarks is contained.
US Treasury Secretary Bessent did not parody “whatever it takes” for Argentina yesterday, saying instead “what is necessary” and then clarifying “necessary” did not mean cash. Foreign exchange dealers’ actions reveal that they think cash is necessary as Argentina’s foreign exchange reserves continue to fall.