Months of economic turbulence are now colliding with data disruptions and divisions inside the Federal Reserve, leaving policymakers uncertain about the actual state of the labor market. The Bureau of Labor Statistics is set to release November’s jobs report on Tuesday, December 16—its first Employment Situation filing since the government shutdown disrupted the nation’s economic data pipeline.
The November report, initially due on December 5, was delayed by 11 days after the shutdown halted survey collection and forced layoffs at the Bureau. The October report was permanently canceled, leaving key information lost for good. According to The Financial Times, the upcoming release will include only a partial read from October, adding to questions about its reliability.
KPMG U.S. Chief Economist Diane Swonk recently posted on X that the November report could be “noisy” because of reopened offices struggling with fewer staff. “We were already down 25% on staffing at [the Bureau of Labor Statistics] due to layoffs ahead of shutdown,” she wrote, adding that a clear picture of the labor market might not emerge until December.
Frances Donald, chief economist at Royal Bank of Canada, told The Financial Times that both jobs and inflation data “may have distortions that don’t give us a clean read” because of methodological adjustments and lingering effects from the shutdown.
The uncertainty comes amid conflicting signals from the Fed. Inflation continues to hover near 3%, above the central bank’s 2% target, while labor growth appears weaker than reported. During a press conference after the Fed’s December meeting, Chair Jerome Powell said the decision to cut rates again stemmed from concerns about labor market softness. “Payroll jobs averaging 40,000 per month since April,” Powell said. “We think there’s an overstatement in these numbers by about 60,000. So that would be negative 20,000 per month.”
The Fed voted to cut another 25 basis points from the federal funds rate that governs overnight bank lending, but the move highlighted growing dissent within the central bank. Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid opposed the cut, while Fed Board Governor Stephen Miran favored a larger, 50-basis-point reduction. The last time three officials dissented on a rate decision was in 2019.
Even a single dissent is unusual, but tension within the Fed has been building since August. The dual mandates of full employment and stable prices work best in calm economic conditions. With both under strain—and vital data in doubt—clarity about the economy’s direction may remain elusive well into 2026.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.