John’s Finance Corner: Shutdown Ends as Critical Data Set to Shape Fed Decision
The recent government shutdown halted the release of key economic indicators — including inflation, retail sales, new home prices, labor market performance, and gross domestic product. With operations now resuming, agencies like the Bureau of Labor Statistics and Bureau of Economic Analysis are expected to announce updated release schedules, which could bring a surge of delayed reports to the market in the coming days.
These missing data points carry major implications for the Federal Reserve, which is preparing for its final policy meeting of the year on December 9–10. Without clear visibility into inflation and employment trends, Fed officials remain divided on whether to issue another Federal Funds Rate cut. Their challenge remains the same: reducing inflation without putting further strain on a labor market that is starting to show signs of softening. Any newly available data before the meeting may significantly sway the Fed’s next move.
In the absence of government-issued labor data, private payroll insights from ADP have become a temporary stand-in. ADP’s latest report showed 42,000 jobs added in October, indicating modest growth. However, its new weekly pay-driven report revealed that U.S. companies cut an average of 11,250 jobs per week during the four weeks ending October 25, signaling potential underlying weakness.
It’s also important to remember how this ties into mortgage trends. Mortgage rates tend to follow the 10-year Treasury yield — not the Fed’s policy rate directly. A rising yield usually means higher mortgage rates, and past Fed rate cuts have not necessarily resulted in rate relief for borrowers. Instead, bond markets respond more directly to inflation readings and labor market performance. Lower inflation and weakening labor conditions historically support improved bond yields and lower mortgage rates.
This week brings two key developments:
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The minutes from October’s Fed meeting, where the Fed issued a quarter-point cut
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The delayed BLS September jobs report, scheduled for release Thursday
A softer-than-expected labor report could ease bond yields and help nudge mortgage rates lower. With limited time before the December Fed meeting, the volume and tone of data released in the coming weeks will be closely watched by markets, policymakers, and anyone considering a home purchase or refinance.
As always, keeping an eye on the 10-year Treasury yield remains the most reliable way to understand daily mortgage rate direction.
John Lamberg
MORTGAGE LOAN ORIGINATOR
NMLS 189233
