This Week In A Nutshell
With the government open, mortgage rates may wobble as we digest the September jobs report this Thursday and hear from the statistical agencies about what fresh data will be arriving before the December 10 Fed meeting.
Upcoming Attractions
- September jobs report (Thursday): This data is expected to show a small rebound in job creation compared to August with the unemployment rate staying flat at 4.3%. The data is old, but in the absence of data, something is better than nothing.
- Updated release calendar: Over the coming week, we expect BLS, BEA, and Census to update their data release calendars. Of particular interest will be the BLS’s plans for the jobs and CPI reports.
- ADP preliminary weekly data (Tuesday): ADP has started to publish weekly data on job creation for the previous four weeks during the government shutdown. This release will cover the four weeks ending November 2.
- Fed events:
- Minutes for Oct 28-29 meeting (Wednesday): At the October 29 press conference, Fed Chair Powell emphasized the strongly differing views on the committee. The minutes should shed some light on the extent of pushback against further cuts.
- Speaking engagements: There are 19 speaking engagements on the calendar for this week, including from New York Fed President Williams on Monday, Wednesday, and Friday; Governor Waller on Monday; Governor Miran on Wednesday and Thursday. We will be looking for clues about how the committee is leaning in the absence of economic data.
- NAR Existing Home Sales (Thursday): Redfin is forecasting October existing home sales of 4.05 million at a seasonally adjusted annual rate (360,000 non-seasonally adjusted monthly rate). This is essentially flat compared to last year.
Last Week’s Highlights
There was little economic data of note last week. The government re-opened, but it will take some time to get the data flowing again. In the meantime, Fed speakers emphasized the need for caution while they are flying blind. That seems to imply a default position of no cut in December (which markets have currently priced in at about 40% odds) unless we get some fresh data arguing for a cut.
Diving a Little Deeper: Economic Data
The most important question for bond markets and the Fed right now is what the BLS plans to do with the missing and upcoming jobs and inflation reports. Here is where that stands right now. As an aside, the Fed preferred inflation gauge is the BEA’s Personal Consumption Expenditures report, but that comes out later in the month and shares many data points with the earlier CPI report, so we will focus on CPI.
| Report | Coverage Month | Original Release Date | Updated Release Date | How will the data be affected? |
| Jobs | September | Oct. 3 | Nov. 20 | Unaffected. The data was collected and almost entirely processed before the shutdown |
| Jobs | October | Nov. 7 | TBD: Any data they choose to collect may be released around Dec. 5 |
The job creation and earnings data (based on establishment survey) is likely to remain fairly accurate. The unemployment rate and labor force participation data (from the household survey) is likely to not be collected or will be biased by recollection error if collected. |
| Jobs | November | Dec. 5 | TBD: likely to remain on or around Dec. 5 | The reference week for data collection was last week. The jobs creation and earnings data will not be affected. The unemployment rate and labor force participation data will be collected, but potentially minimally biased by late collection. |
| Jobs | December | Jan. 9 | Jan. 9 | Unaffected |
| Inflation (CPI) | September | Oct. 15 | Oct. 24 | Unaffected as the data was collected prior to shutdown and staff were brought back to finish processing in October. |
| Inflation (CPI) | October | Nov. 13 | TBD: Data unlikely to be collected or released | If this data were to be collected, it would be very biased because many data points are collected by BLS field economists going to a store. |
| Inflation (CPI) | November | Dec. 10 | TBD: likely to remain around on or around Dec. 10 | Slightly affected by compression in data collection schedule |
| Inflation (CPI) | December | Jan. 13 | Jan. 13 | Unaffected |
