Fed's Division on Rate Cuts Widens as October Employment Figures Disappear, Obscuring Policy Direction
- U.S. Bureau of Labor Statistics cancels October jobs report, leaving unemployment and nonfarm payroll data missing due to government shutdown. - Fed faces policy uncertainty as internal divisions deepen over rate cuts, with October meeting minutes revealing stark disagreements on 2025 reductions. - Delayed November report and missing household survey data complicate labor market assessment, risking misaligned inflation and employment policies. - Trump administration pressures Fed for lower rates while ma
The U.S. Bureau of Labor Statistics (BLS) has decided not to publish the October jobs report, meaning figures for unemployment and nonfarm payrolls for that month will not be released due to interruptions from the recent government shutdown. Instead, the BLS will merge October's nonfarm payroll numbers with the November report, but the household survey—which is essential for determining the unemployment rate—will be
Disagreements within the Fed over interest rate reductions have intensified, as the minutes from the October meeting reveal sharp divisions among members. Although a 25-basis-point cut was approved in October, officials were divided on whether further cuts—especially in December—were justified. The minutes indicated that "many" members felt no further reductions would be needed in 2025, while "several" believed there was still room for another cut
The missing October unemployment figures have increased market volatility. Investors, who were almost certain of a December rate cut, are now adjusting their expectations in light of the Fed’s divided stance. The delay in the November report, along with the Fed’s extended data collection, has left traders uncertain about the state of the labor market and inflation risks
Mixed signals from the labor market further complicate the situation. While October’s nonfarm payrolls will eventually be included in the November figures, the absence of household survey data means the unemployment rate will not be known. This lack of information could lead to policy missteps, as the Fed’s dual goals of maintaining employment and controlling inflation depend on having comprehensive economic data
The broader consequences for financial markets are considerable. With divisions within the Fed growing, investors are preparing for a less predictable policy landscape. The cancellation of the October report and the subsequent delay of November’s data have highlighted the vulnerability of the U.S. economic system, especially in an election year marked by political division and uncertainty
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