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1. Government Shutdown Begins as Funding Lapses — Government funding lapsed early Wednesday morning after the White House and lawmakers failed to reach a spending deal, triggering a shutdown that is expected to halt some federal services and put hundreds of thousands of federal workers on furlough. The shutdown could be more consequential than those that have happened in the past. Trump administration officials have said they plan to use the shutdown to reduce the size of the government, moving to cut jobs across agencies. That effort is already being challenged in court. The funding lapse will have far-reaching ramifications. For the duration of the shutdown, the Labor Department is expected to pause the release of economic data—likely including a highly anticipated jobs report that was set to be made public on Friday. The Centers for Disease Control and Prevention will stop analyzing surveillance data for reportable diseases. Many planned workspace-safety inspections will be canceled. And workers won’t trim grass and install headstones at national cemeteries.
2. U.S. Factory Activity Contracts at Slower Pace — The Institute for Supply Management said Wednesday that its purchasing managers’ index of manufacturing activity edged up to 49.1 in September from 48.7 in August. Economists polled by The Wall Street Journal expected an index of 49.0.
With the reading still below 50, it points to contraction in activity in the sector for a seventh month in a row, though a score above 42.3 on the index generally tallies with expansion in the wider U.S. economy. However, the combined drops in the indexes for new orders and inventories exceeded the increase in the production index, rendering the overall improvement negligible, she said.
3. Trump Eyes Firing ‘Thousands’ of Federal Workers Over Shutdown — President Donald Trump is weighing slashing “thousands” of federal jobs ahead of a meeting with his budget director, Russell Vought, as the White House looks to ratchet up pressure on Democrats to end a government shutdown that has entered its second day. Republicans have sought to use the threat of permanent cuts to the federal bureaucracy to encourage Democrats to vote to reopen the government, and the White House has said firings could happen imminently. But some budget experts have argued that spending money to conduct permanent layoffs during a shutdown is illegal.
4. Trump Explores Bailout of at Least $10 Billion for U.S. Farmers — President Trump is considering providing $10 billion or more in aid to U.S. farmers as the agriculture sector warns of economic fallout from his far-reaching tariffs, according to people familiar with the discussions. The president and his team are weighing using tariff revenue to fund much of the aid, the people said, adding that distribution of the money could start in the coming months. A senior administration official said the discussions have centered on $10 billion to $14 billion in aid. The aid likely would go toward helping soybean producers, as well as other parts of the farm economy. Trump said earlier this week that he planned to push Chinese leader Xi Jinping to buy U.S. soybeans to help struggling American farmers. The two leaders are scheduled to meet on the sidelines of a summit in South Korea in the coming weeks. A deal with China to buy soybeans could change Trump’s calculation about providing aid to farmers, the official said.

The week ahead — Economic data from Econoday.com: