John’s Finance Corner: Data Gaps Create Market Uncertainty
With the ongoing government shutdown, several key economic reports have been delayed, leaving the Federal Reserve and bond markets with limited data to guide decisions. The absence of timely information has created more uncertainty for policymakers and traders alike.
Last week’s Bureau of Labor Statistics (BLS) report was not released, but the ADP private sector report offered some insight, and it wasn’t encouraging. The data showed that the private sector lost 32,000 jobs in September, missing expectations of a 50,000-job gain. In addition, August’s figures were revised downward from a gain of 54,000 to a loss of 3,000 jobs.
While wage growth remains relatively strong, it is showing signs of slowing. Job switchers saw a 6.6% annual wage increase, down from 7.1% in August. Those who stayed in their current roles earned 4.5% more than a year ago. Overall, the private sector has now posted job losses in three of the past four months.
ADP Chief Economist Dr. Nela Richardson summed it up:
“Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market that U.S. employers have been cautious with hiring.”
The ADP report takes on added significance this month due to the delay in official government data. Normally, the BLS report would play a major role in shaping the Fed’s next rate decision at its upcoming October 29th meeting. Without it, the ADP data becomes one of the few reference points for assessing economic momentum.
With fewer domestic indicators to rely on, attention turns to housing and global markets. This week, ICE and CoreLogic are expected to release their latest home price appreciation data, which could offer some much-needed clarity. Meanwhile, mortgage rates which tend to follow the 10-year Treasury yield may be influenced more heavily by international economic developments as investors look abroad for direction during the shutdown.
As always, I’ll continue monitoring these developments closely to help guide you through the changing market landscape.
John Lamberg
MORTGAGE LOAN ORIGINATOR
NMLS 189233
