With the U.S. government shutdown still clouding official labor statistics, alternative data from private firms and banks is sending a clear message: the labor market is cooling, and markets are betting big that the Federal Reserve will respond with another rate cut at its Oct. 30 meeting.
The absence of the September jobs report from the Bureau of Labor Statistics due to the shutdown has left investors and policymakers in the dark.
The last official nonfarm payroll figure—just 22,000 jobs added in August—already signaled stagnation, with the three-month average stuck around 29,000.
Private Payrolls Show Job Losses In September
In lieu of public data, private sources are painting a troubling picture.
The ADP payrolls report released last week showed private employers cut 32,000 jobs in September. That follows a downward revision for August to a 3,000 job loss and marks the sharpest decline since March 2023. Economists had expected a 50,000 gain.
It’s also the first time since 2020 that the private sector has posted two consecutive months of job losses, a red flag for an economy that had seemed resilient just months ago.
Meanwhile, the Institute for Supply Management’s Services …