WSJ What’s News - What Would It Take to Reopen the U.S. Government?

Episode Date: October 1, 2025

P.M. Edition for Oct. 1. As hundreds of thousands of government workers receive furlough notices, lawmakers take to press conferences to point fingers. WSJ White House reporter Natalie Andrews discusses the latest on the shutdown and what it might take to end it. Plus, payroll processor ADP says the U.S. lost 32,000 jobs in September, surprising economists. We hear from WSJ economics reporter Konrad Putzier about what this says about the labor market. And for years luxury housing has been a bright spot in the broader housing market. But now its growth is slowing. Journal residential real-estate reporter E.B. Solomont digs into what’s behind it. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's day one of the government shutdown, and the path to reopening looks murky. Plus, new payroll data gives an unwelcome surprise on the state of the jobs market. And it's not just your average home buyers, even the luxury housing market is starting to crack.

When luxury buyers and sellers pull back because they feel some uncertainty, that's an uncertainty that's going to be shared by everyone throughout the market. It's Wednesday, October 1st. I'm Alex O'Sullough for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Hundreds of thousands of workers across the federal government received furlough notices today,

and it's not clear when or if they'll be coming back to work. At the center of the debate over a spending deal between lawmakers, enhanced subsidies for Affordable Care Act health insurance plans that are set to expire at the end of the year. Republicans had pushed to temporarily extend current government funding levels to buy time for negotiations. But Democrats say they won't vote for any bill that doesn't extend the ACA subsidies. Top members of each party took to cable news and held press conferences on Capitol Hill today to point fingers. On Fox News, Vice President J.D. Vance laid out the terms under which he'd be willing to negotiate. I'd offer right now to the Senate Democrats, I'm happy. I will go to the Capitol right now to talk to Chuck Schumer and Senate Democrats about premium support for the Affordable Care Act,

but only after they've reopened the government. Meanwhile, speaking on the Senate floor, Senate Minority Leader Chuck Schumer laid the blame on Republicans. If House Republicans bend to the insatiable whims and demands of their hard right flank, if they corrode the appropriations process with poison pills and extremist policy proposals, then they will be responsible for moving us close. closer to a shutdown. For more on the shutdown and how it may end,

I'm joined now by WSJ White House reporter Natalie Andrews. Natalie, there was talk before the shutdown that some of those furloughs of government workers would turn into layoffs. Has there been any progress or comment made about that? The director of OMB, which is the Budget Office, Russ Vote, told House Republicans in a private phone call on Wednesday that the layoffs are coming and that they will be consequential.

He didn't give an indication or real specifics, but he said it will be big and he said it will happen in the next day or two. Where does Congress stand? Like, where does this conversation around a path to reopening the government stand right now? I would say it's covered in mud, rocks, and debris. It's a toxic relationship at this point between Democrats and Republicans. The Democrats have lost trust for Republicans, so that's why they're putting their foot down now. There's politics at play. Chuck Schumer got lambasted by his party for voting to keep the government.

open in March, so that's top of his mind. They don't trust that Trump wants to talk about health care for Americans because OMB has pulled back spending that Congress approved before. And it's going to be very hard for someone to blink and come together and somewhat repair this relationship enough to open the government. President Trump's say-so is clearly needed in order to end this shutdown. Where does he stand on health care issues and this whole morass? The idea of expanding these Affordable Care Act subsidies or continuing them when they expire at the end of the year, that is a bipartisan thing. It's thought that that could be the way out of this because there are enough votes in the Senate to continue these enhanced ACA subsidies, which help the poorest of the poor Americans. But Democrats, they're using their only leverage they get.

They're also asking for more than that. They are pointing to a lot of health care cuts that they say have happened by Republicans this year. Their ask is bigger. That was WSJ White House reporter, Natalie Andrews. Thanks, Natalie. Thank you. The U.S. lost 32,000 private sector jobs in September. That's according to the payroll processor ADP.

And it's down from a revised loss of 3,000 in August. Economists polled by the Wall Street Journal had expected an increase of 45,000. For more, I'm joined now by WSA economics reporter, Conrad Puts here. Conrad, these numbers paint a picture of a job market that is worse than economists anticipated. Where are we seeing the weakness? So, yeah, this is bad news for the state of the economy. We're seeing weakness in a number of sectors. And a noteworthy one is leisure and hospitality, which shed 19,000 jobs last month. And that's really important for two reasons. One is leisure and hospitality has been a bright spot in the last few years since COVID. There's

been a lot of wage gains, a lot of job gains in that sector. And the second one is it's a really cyclical sector that tends to weaken when the economy weakens. So this is certainly a warning sign for the health of the labor market and the health of the economy. The one caveat here is this is a survey by ADP, which economists generally say is less reliable and less important than this bigger survey by the labor department, which comes out usually once a month, this month, maybe not. Right. I was going to ask you about that with this government shutdown where many people are expecting not to get Friday's monthly jobs report from Bureau of Labor Statistics.

How does ADP data generally stack up against BLS data? What are the differences? So the differences are basically the BLS data as a survey where they ask companies, hey, did you fire, did you lay people off? ADP is a company that manages payrolls for a bunch of people, and they have this data set of around 26 million people across the country that they basically manage the payroll for, which sounds like a lot, but actually 170 million people in the U.S. work. so it's really just a small part of the labor force.

And often what that means is the ADP data doesn't match exactly with the Bureau of Labor Statistics Survey, which is this broader survey of the whole economy. But with that said, in recent months, ADP has been pretty good actually at predicting what the BLS data will say. It's become more reliable. And even if individual months can be off,

often the direction of the ADP data is still pretty meaningful. And so what we've had now is two straight months of job losses in the ADP data. So it's not just one month, it's two straight months. That's still a warning sign. That was WSJ reporter, Conrad Puts here. Thank you, Conrad. Thanks for having me. Despite the shutdown and the jobs numbers, major U.S. stock indexes ended the day higher, driven in part by sharp gains across the pharmaceutical sector following yesterday's announcements on drug pricing. The NASDAQ rose about 0.4%. The S&P 500 was up roughly 0.3,000. And the Dow added about 0.1%.

In business news, Walmart says it's working to remove synthetic dyes from all its store brand foods. It's the latest big food company to shift away from artificial ingredients in packaged goods. As the Trump administration and its Make America Healthy Again movement take aim at processed food. And META says it'll start using people's conversations with its AI chatbot to help personal ads and content. Our tech reporter Megan Babowski explains how it'll work. So for instance, if you ask their chatbot, hey, what are some good hiking trails nearby? You might start seeing ads for hiking boots or other hiking related gear. Obviously, Meta has a huge ads business. They've already been using AI to better match ads to users. And so this is yet another way they are planning to show you

ads that you are most likely to click on and most likely to buy something from. Users won't be able to opt out of the policy when it goes into effect on December 16th. But the company said that the content of some conversations, such as those involving religious or political views, sexual orientation, health, and racial or ethnic origin won't be used to customize ads or content. Coming up, the luxury housing market is slowing. What that says about the broader economy after the break. Arab mediators say that Hamas has indicated it's open to accepting President Trump's peace plan for Gaza,

but it's asking for more time to review its conditions. The militant group is facing intensifying pressure from Muslim governments to agree to the proposal, which is backed by Israel. The Supreme Court today allowed federal reserve. serve Governor Lisa Cook to keep her job for now, and it scheduled arguments in January to consider President Trump's bid to fire her. In a brief order, the court deferred a decision on the administration's emergency request to remove Cook from the Central Bank's independent board, while a lawsuit challenging her dismissal moves ahead. And the Energy Department says the U.S. government is taking

a 5% stake in lithium Americas, as well as a 5% stake in the Vancouver-based company's Nevada a mining project. It's a restructuring of a more than $2 billion U.S. government loan agreement from 2024. With its stake, the government aims to boost the U.S. supply chain for lithium and to reduce reliance on overseas suppliers. For the past few years, luxury homeowners have continued to buy and sell real estate, even as the overall housing market contracted. Now, though, they're starting to slow down, too. According to Redfin, the number of luxury home sales nationwide fell 0.7% year over year for the three months ending August 31st, the lowest level for that period since the company began tracking the market in 2013.

E.B. Solomon covers residential real estate for the journal and is here now with more. E.B. Luxury homeowners are less impacted by interest rates, which have been higher recently. So what's slowing down the luxury housing market? It's a really interesting question because for the past few years, the luxury home sector has been really strong, But starting over the summer, the luxury market really pulled back. And one of the key reasons is the economic uncertainty of this spring. The tariffs and the trade wars from April really had a chilling effect on the market in the sense that there were wild swings in people's wealth. And for the first time in a long time, people were just a little bit uncertain about which way the economy was heading.

What relationship does a luxury housing market have to the broader housing market and the economy? What can we zoom out from this to know? It's such a great question because in so many ways the luxury market is disconnected from the rest of the market. Remember, luxury buyers, they're not impacted as much by interest rates in the sense that they don't rely on that low interest rate in order to make a purchase. But remember that they do look at interest rates as a barometer for the economy and for their finances. Although the luxury market is disconnected in a lot of ways, there's a parallel. And so when luxury buyers and sellers pull back, because they feel some uncertainty, that's an uncertainty that's going to be shared by everyone throughout the market. That was WSJ reporter, E.B. Solomon.

And that's what's news for this Wednesday afternoon. Today's show is produced by Pierre Biennameh and Rodney Davis with Deputy Editor Chris Zinsley. I'm Alex O'Sullough for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. You know,