As mentioned yesterday, it’s almost certain now that we will see key economic data from the US get delayed this week. The shutdown is one that might even last longer than what we saw at the end of 2018, so strap yourselves in. It might be a bumpy ride over the next few weeks.
The US Department of Labor has come out to say that the weekly data about jobless claims will be delayed. So, that means we’ll only get the Challenger job cuts report to work with in the day ahead. However, jobless benefits will still be handed out even if the data release is absent so long as state agencies have administrative funding to process them.
The thing about the latest shutdown now is how it will impact jobs on a more permanent basis. Otherwise, it just presents more of an operational risk rather than an economic one for the most part. And investors clearly voted yesterday on how they felt with the rebound in the stock market.
That being said, the White House came out yesterday to warn that layoffs to the federal workforce are “imminent”. Press secretary Karoline Leavitt said: “We believe that layoffs are imminent. They are, unfortunately, a consequence of this government shutdown.”
We don’t know the extent of that and when it will happen but that will be something to be wary of at least.
In the meantime though, there will be delays to this week’s economic data releases. But as mentioned before, that doesn’t mean that the Fed will be flying totally blind ahead of the October meeting. And market players are still convinced that a 25 bps rate cut is the right move, so carry on as you will.
