UPDATE: The highly anticipated US inflation report faces major disruptions as the government shutdown has postponed the release of critical October data. The US Bureau of Labor Statistics (BLS) will now focus solely on the November numbers, raising concerns among economists and market players about the reliability of the upcoming figures.
The BLS has confirmed that the October report has been skipped due to the ongoing shutdown, creating a gap in essential economic data. Analysts predict that the November inflation rate will register at 3.1%, a slight increase from 3.0% in September. Core inflation, which excludes volatile food and energy prices, is expected to remain steady at 3.0%.
Despite the missing October data, some figures may still be available. The BLS utilizes online pricing and private data sources, which might allow for a partial overview of inflation trends. However, the emphasis will largely shift to a two-month analysis, leading experts to caution that the upcoming report may not provide a clear picture of inflation dynamics.
Leading financial institutions are weighing in on the potential implications of this report. Bank of America (BofA) estimates that core CPI will average 0.23% month-over-month across October to November, forecasting a year-over-year decline in headline and core CPI from 3.0% in September to 2.9% in November. They attribute this to new health insurance data that could negatively impact inflation figures.
Meanwhile, Goldman Sachs anticipates that core CPI will average 0.21% month-over-month during the same period, highlighting that the lack of October data will necessitate a focus on year-over-year changes. They predict upward pressure from tariffs affecting certain goods, counterbalanced by downward pressure from delayed data collection, particularly in categories known for steep holiday discounts.
Analysts at Barclays are projecting a core CPI average of 0.29% month-over-month, warning that the incomplete October data may lead to a misleading inflation portrayal for November. They emphasize that price changes will need to be viewed with caution, as collections were primarily conducted in the latter half of November, which coincides with Black Friday sales.
This developing situation underscores the urgency for investors and policymakers who rely on accurate inflation data to make informed decisions. With the BLS’s report looming, all eyes will be on the November figures, which will be released on December 13, 2023. The potential impacts of these inflation trends on monetary policy and consumer spending are significant and warrant close attention.
As the situation evolves, market participants are advised to brace for volatility. The lack of October data may lead to uncertain market reactions, and analysts will be closely monitoring the implications of this incomplete report. Stay tuned for further updates as we approach the critical release date.
