September Jobs Report Shows Strength but Raises New Questions
The U.S. economy added 119,000 jobs in September, far exceeding expectations despite downward revisions to prior months. The unemployment rate rose to 4.4%, while wage growth slowed, offering mixed signals about labor market momentum. Because the report reflects data collected before the government shutdown, economists caution that it provides an outdated snapshot of current conditions. Markets reacted positively, viewing the stronger payrolls and softer wage data as potentially supportive of the Federal Reserve pausing rate cuts in December.
Key Inflation Reports Delayed After Shutdown
The October CPI report was canceled because the government shutdown prevented the BLS from collecting necessary price data. November’s CPI will now be released on December 18, after the Federal Reserve’s December 10 rate decision. The Fed will also lack the PCE inflation report, which has been postponed without a new date. With these gaps, policymakers warn they are operating in a “data fog,” though some officials still see room for potential rate adjustments.
Fed Split on Path of Future Rate Cuts
Federal Reserve officials were sharply divided at their October meeting over whether slowing job growth or persistent inflation posed the bigger risk to the economy. While they approved a quarter-point rate cut, many officials signaled they may not support another reduction in December, leaving the outlook uncertain. The minutes showed disagreement over how restrictive current policy is and highlighted competing camps of dovish, hawkish, and moderate policymakers. The decision-making was further complicated by the recent 44-day government shutdown, which left the Fed operating without key economic data.
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