Data Reporting Lags from Shutdown Complicate Fed's Rate Decision Amid Increase in Unemployment Claims

For the week ending October 18, U.S. unemployment claims reached 232,000, surpassing analyst forecasts and indicating a slowdown in the labor market, even as initial claims had recently declined

. Figures from the Labor Department’s historical records show an increase from the previous week’s 219,000 and . Ongoing claims, which track those still receiving benefits, rose to 1.957 million, . The economic outlook has become more uncertain due to the delayed data release caused by the government shutdown, with three weeks of claims data still unavailable .

The Labor Department has stated it will not issue October’s employment report,

ahead of the Federal Reserve’s December meeting. Fed policymakers are now divided on whether to maintain or lower rates, from 62% just a week ago. The labor market’s mixed signals— —have made the case for aggressive rate cuts less compelling. “Even a slight uptick in unemployment would be a strong indication that the economy needs more support,” said Ed Al-Hussainy of Columbia Threadneedle .

The uncertainty in the data has unsettled financial markets.

dropped below $86,000, wiping out gains made in 2025, as diminishing expectations for a Fed rate cut reduced risk appetite . Bond markets are also tense, as investors await the September jobs report, which is now set for November 20. Meanwhile, the housing sector remained strong, in October as mortgage rates fell.

The government shutdown also postponed the September employment report,

. Economists are forecasting 58,000 new nonfarm jobs and a 4.3% unemployment rate. However, to turn to other indicators, such as state-level claims and seasonal adjustments.

With the Fed facing gaps in key data, investors are staying cautious. “The Fed won’t have much additional top-tier data before the meeting,” said Dan Carter of Fort Washington

. The next steps will depend on whether the delayed September report points to a labor market that supports further easing or suggests a pause is needed. For now, volatility dominates as traders await more clarity—or brace for continued uncertainty.