BofA looks at what to expect from a post-shutdown "data dump"
Investing.com - The flow of official U.S. economic data is due to resume next week after the end of the federal government shutdown, but some of these figures may not be released before the Federal Reserve’s next two-day meeting in December, according to analysts at BofA Securities.
Investors and policymakers alike were left without a raft of key indicators of the health of the world’s largest economy during the more than 40-day shutdown, which was resolved earlier this week.
This has proved to be particularly critical for the Fed. Officials rely heavily on new data, especially gauges of employment and inflation, when calibrating monetary policy decisions.
Interest rates were reduced by the central bank in September and October, as part of a push to provide support to a slowing labor market. However, the Fed, devoid of a range of up-to-date economic figures, now appears to be largely divided over whether to cut borrowing costs further at its final two-day policy gathering in December.
At the moment, it is about a 50-50 toss-up if the central bank will roll out another cut next month, CME’s FedWatch Tool has found.
Against this backdrop, markets are gearing up for a "data dump" next week, including the postponed September jobs report. But the figures for October will likely not include the latest unemployment rate, the White House has flagged, while the BofA analysts suggested that the November jobs data will be "complete but delayed."
The Bureau of Labor Statistics, which gathers the data, will also "probably skip" October’s consumer price index, a closely-monitored inflation metric, the analysts including Aditya Bhave and Stephen Juneau said. November’s CPI, meanwhile, "could be distorted" by Black Friday sales, they added.
Notably, "the data for October/November might not be released before the Fed’s December 10 meeting," they noted, flagging that Fed Chair Jerome Powell has hinted that rates may be kept unchanged in this scenario.
