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Fed's Division on Rate Cuts Widens as October Employment Figures Disappear, Obscuring Policy Direction

Fed's Division on Rate Cuts Widens as October Employment Figures Disappear, Obscuring Policy Direction

Bitget-RWA2025/11/20 02:40
By:Bitget-RWA

- 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

. This situation has disrupted a vital economic metric, creating uncertainty around the Federal Reserve’s (Fed) upcoming policy moves and market forecasts. The November jobs report, now , will be published after the Fed’s policy meeting on December 9-10, making it harder for the central bank to respond quickly to changes in the labor market.

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

. This divide highlights broader economic uncertainties, including the effects of President Donald Trump’s trade actions and , which have delayed the release of important data. Fed Chair Jerome Powell, during his remarks after the meeting, admitted there was no clear agreement, saying that a rate cut in December was not a "given"—a shift from what markets had previously expected .

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

.
Fed's Division on Rate Cuts Widens as October Employment Figures Disappear, Obscuring Policy Direction image 0
Meanwhile, the Trump administration has criticized the Fed’s cautious approach, with the president again urging for "much lower interest rates" to boost economic growth .

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

. Experts caution that the Fed’s delayed access to data might result in reactive rather than proactive policy changes, potentially increasing market turbulence .

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

. As the December meeting nears, the Fed’s challenge to balance inflation concerns with labor market issues will be under close scrutiny, with the results likely to influence global stock and bond markets.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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