The government shutdown in the US has disrupted the economic calendar. Many of the most critical data points tracked by the markets are compiled by the government, which is nominally not working. Some of the data may be delayed, and its impact on the market could be different.
Perhaps the most important for Forex at the moment is the US non-farm payrolls, compiled by the Bureau of Labor Statistics (BLS). That’s because the Fed has moved into easing mode in response to signs of a weakening job market in the US. Traders would have been closely examining the NFP data to determine if the labour market was still weak enough to justify the expected rate cuts this year.
When Will September NFP Come Out?
According to the BLS’s contingency plan for a shutdown, it would reduce its active personnel to just one person. But it also plans to function with full staffing for three days after the shutdown to back up data. That means the Bureau will still be staffed at the normal time the data would be released. There has been no official communication regarding whether the NFP data will be published or rescheduled.
Since the shutdown started after September, the BLS presumably has the data and could publish it. The last time there was a government shutdown, the BLS did make the data available, but only on its website. That meant news agencies had to scramble to get and publish the data, causing extra volatility in the markets. It’s unclear if that will happen this time around.
What Happens if the Government Reopens?
If the data isn’t published at the regular time, then there is no precedent for what happens. When politicians in Washington reach an agreement on spending, it’s unclear whether the BLS will immediately release the data. It is reportedly taking three days to back up the data, so does that mean it will take three days after the shutdown to release it? Will the BLS publish a new calendar of releases before publishing? Or will the data be released immediately after the government reopens? All of those are unknown at this point, and there has been no clarification from the BLS.
Taking those factors into consideration, traders will have to be ready for the data release at any point after the normal release time on Friday. The market is pricing in two rate cuts for the rest of the year, so it would probably take a large surprise in the data to significantly move the markets. But the data itself could be a surprise, given the uncertainty around when and how it will be made available.
What to Look Out For
The consensus is for September NFP to come in at +50K, an increase from 22K a month earlier. But that is still far below the “normal” range of a healthy job market, which is between 150-200K. After Wednesday’s ADP figure came in negative, marking the worst reading since the pandemic, the market appears fairly confident that the NFP figure will confirm expectations for the Fed’s rate cuts. It would take a pretty large beat to shake the market’s confidence.
The unemployment rate is anticipated to be unchanged at 4.3%. An increase in the rate would be in line with market expectations. However, a drop in the unemployment rate might signal that, although hiring is slow, the market remains tight and could continue to contribute to inflation. That might have a bigger impact on the markets than the headline NFP figure.
![Credit Card 160×600 [EN]](https://assets.iorbex.com/blog/wp-content/uploads/2023/06/13144507/Blog-Banner_EN-Banner_160X600X2.webp)
