Look for a quarter-point cut even though the BLS will post the CPI ahead of the meeting.
 

CME Fedwatch rate cut odds

CME Fedwatch sees a 94.7 percent chance of a quarter-point cut by the Fed with a 5.3 percent chance of a half-point cut.

The two key reports are jobs and and the CPI. The latter will be concocted, and the former will be further delayed.

US Shutdown Threatens to Erode Quality of Important Inflation Data

Bloomberg reports US Shutdown Threatens to Erode Quality of Important Inflation Data

The US government shutdown threatens to erode the quality of one of the nation’s most important inflation statistics — if there even is a report at all.

Policymakers, economists and investors are already worried about how October’s consumer price index, due for release next month, will be affected by the government shutdown. While the Bureau of Labor Statistics was directed to recall some staff to prepare the September CPI in a rare exception, the agency hasn’t been able to collect any new price information since the Oct. 1 closure.

“Starting now, accuracy is getting worse,” Omair Sharif, president of Inflation Insights LLC, said in an Oct. 9 interview, just over a week into the shutdown. “By the third week, you’re looking at very bad quality — or no data at all.”

Of all the government data that isn’t produced in a lapse of funding, the CPI stands out because of the labor-intensive nature of collecting prices. The BLS gathers information about roughly 80,000 items across the country, mostly done in-person through three 10-day periods throughout the month.

That was already a challenge with staffing cuts in the Trump administration — due to resource constraints, the agency has suspended parts of the CPI sample in recent months and consequently leaned more on a particular kind of imputation to fill in the blanks.

“They cannot go back to the past, so they will impute more,” said Erica Groshen, who served as BLS commissioner during the 2013 government shutdown. The staff will also probably have to work faster, or possibly put in overtime due to the compressed timeline, she said.

Like any other government report in a shutdown, the September CPI — originally scheduled for release Wednesday — wouldn’t have come out on time, even though all data collection was completed by Sept. 30. But BLS was told to bring back workers to assemble it so the Social Security Administration could meet a deadline to make its annual cost-of-living adjustment for recipients next year. The data is now due Oct. 24.

While that will come in time for the Federal Reserve’s meeting at the end of this month, missing data in the shutdown — particularly for October — could make policymakers’ job more difficult, Chair Jerome Powell said at a conference Tuesday.

“Don’t put too much weight on anything abnormal in October,” said Veronica Clark, an economist at Citigroup Inc. “Take it with a grain of salt.”

Thirteen Delayed Reports

• Oct 1: Census Department – Construction Spending
• Oct 2: Census Department – Motor Vehicle Sales
• Oct 2: Labor Department – Jobless Claims
• Oct 2: Census Department – Factory Orders
• Oct 3: BLS – Employment Situation (Nonfarm Payrolls Household and Establishment surveys)
• Oct 7: BEA – Trade Balance
• Oct 9: Labor Department – Jobless Claims
• Oct 15: BLS – CPI (Delayed Until October 24)
• Oct 16: Census Department – Retail Sales
• Oct 16: BLS – PPI
• Oct 16: Census Department – Business Inventories
• Oct 17: Census Department – Housing Starts and Permits
• Oct 17: Census Department – Import and Export Prices

Next week, more reports will go missing.

The only expected report the Fed will have in hand is the CPI.

The November CPI report (for October) will be severely damaged goods due to missing manual data collection.

Trump Recalls BLS Workers to Produce CPI Report

On October 10, I noted Trump Recalls BLS Workers to Produce CPI Report Because SS Payments Need It

Quick CPI Summary

• The Trump administration is recalling furloughed workers to publish the September consumer-price index, which is used for various government services.
• The Social Security Cost of Living Adjustment (COLA) for 2026 relies in part on September CPI data.
• September inflation data also affects Treasury inflation-protected securities, and I bonds.
• The Fed uses CPI data in its determination of monetary policy

Related Posts

September 11, 2025: CPI Provides No Reason for Fed to Cut Interest Rates, It Will Anyway

The CPI was higher than expected in August, but the Fed will do what it wants to do.

October 7, 2025: How Screwed Up Are BLS Real and Nominal Median Earnings?

Discrepancies between ADP and the BLS are vast. Let’s start with the BLS.

Is Homeowners Insurance Understated in the CPI?

I discussed homeowners insurance on August 11, 2025 in Is Homeowners Insurance Understated in the CPI? Shop Around!

Our Insurance went up by $2,000. Then another $2,000. Here’s our story.

Also consider Where Do You Spend Money on Food? How Screwed Up Are the BLS Weights?

Does the BLS match your budget?

Don’t worry, Trump says “There is virtually no inflation.”

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