The usual rhythm of economic data releases has been disrupted, as the government shutdown prevented the release of the October Consumer Price Index, a key inflation measure tracked by the Bureau of Labor Statistics. Typically, analysts would examine the latest figures, comparing the cost of a broad basket of goods and services to those of previous months. This time, however, the report never materialized—delayed by the shutdown and unlikely to appear until mid- to late-December.
The Bureau of Economic Analysis’ Personal Income and Outlays report, which the Federal Reserve prefers for its inflation gauge, is also in jeopardy, with its scheduled November 26 release now uncertain. As Barron’s noted, the absence of official data has forced economists and investors to turn to private sources for clues about inflation’s trajectory.
FactSet’s economist survey estimated October inflation at 0.2% month-over-month and 3% year-over-year, closely matching the official September figures. If accurate, inflation remains a full percentage point above the Fed’s 2% target. PriceStats, a State Street service that tracks prices from more than 1,500 retailers across 27 countries, reported that inflation’s upward trend slowed in October. While PriceStats data typically runs lower than official U.S. figures, it generally moves in parallel with them. The service noted higher prices for household equipment, furniture, electronics and food, driven in part by increased tariffs.
The lack of timely, comprehensive data complicates the Federal Reserve’s decision-making ahead of its December 9–10 meeting. The BLS relies on physical contact with retailers and extensive analysis, processes that have been interrupted by the shutdown. Sam Coffin, a Morgan Stanley economist, told Barron’s that the January report—released in February—will be the first to reflect a survey as robust as usual. During a 16-day shutdown in 2013, the BLS collected only three-quarters of its typical data.
With both inflation and labor market data incomplete, the Fed faces a dilemma: each could call for opposite policy moves. According to CME Group’s FedStat tool, which analyzes 30-day fed funds futures, there is a 47.9% chance the Fed will hold rates steady and a 52.1% chance of another 25-basis-point rate cut.
The uncertainty continues to grow. White House Press Secretary Karoline Leavitt told reporters this week that both the inflation and jobs reports for October will "likely never be released." This will undeniably make the central bank's decision harder about whether to cut interest rates at its final meeting of the year or leave them unchanged.
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