The Bureau of Labor Statistics (BLS) announced that it will not release an October jobs report due to the ongoing government shutdown. This decision significantly affects the Federal Reserve’s ability to make informed decisions regarding interest rates, as the latest job data will not be available before its final meeting of the year on December 9-10.
The BLS stated that the shutdown hindered its ability to collect household data from the Current Population Survey, a critical component for calculating the unemployment rate. The agency confirmed that this data cannot be retroactively collected, which further complicates the situation for policymakers.
In addition to the cancellation of the October jobs report, the BLS has delayed the release of November’s jobs data to December 16. This report will include information on job creation from October, derived from the business establishment survey. Consequently, the Federal Reserve will miss access to the most current jobs data, which is vital for its decision-making process. The last full jobs report was published in early September, with the next scheduled report for November 20.
The implications of this delay are already being felt in the financial markets. Following the BLS announcement, the CME Fed Watch tool indicated an increase in the probability of the Federal Reserve holding interest rates steady during its December meeting, rising from approximately 50% to 66%.
Furthermore, the BLS will not publish a separate Job Openings and Labor Turnover Survey for September; instead, this data will be included in the October report set for release on December 16. The record government shutdown lasted for 43 days and has had a far-reaching impact on funding and operations across various federal agencies.
This situation underscores the challenges faced by the Federal Reserve as it navigates economic conditions without the benefit of timely labor market data. The organization relies heavily on monthly unemployment and job vacancy figures to guide its monetary policy decisions, making the absence of this information a significant obstacle. As the Fed approaches its year-end meeting, the lack of updated job figures raises uncertainties about potential adjustments to interest rates in the near future.
