Fed Flying Blind: U.S. Scraps October PPI Release as Shutdown Delays Cripple Data

Another key economic indicator vanishes into the fog. The U.S. government just scrapped the October Producer Price Index release, leaving the Federal Reserve to navigate monetary policy with one less instrument on the dashboard.

Data Blackout Deepens

Shutdown-induced processing delays have gutted the economic calendar. The PPI—a critical gauge of wholesale inflation pressures—joins a growing list of casualties. Without this forward-looking signal, policymakers lose visibility into pipeline price trends before they hit consumers.

Flying on Instruments That Aren't There

The Fed's 'data-dependent' mantra now faces a brutal test. How do you calibrate interest rates when your primary gauges are offline? Analysts scramble to patch the hole with private-sector proxies and backward-looking figures—a classic case of driving by looking in the rearview mirror.

Markets Hate Uncertainty More Than Bad News

This data vacuum injects pure volatility fuel. Traders despise uncertainty more than negative data. At least with bad numbers, you can price the risk. A blackout? That's just guessing—and Wall Street's multi-billion dollar guessing games tend to get messy. It’s the financial equivalent of asking pilots to land in a storm with no altimeter.

One cynical take? The government's budget dysfunction now offers a convenient smokescreen. No data means no embarrassing inflation prints to explain ahead of the next election cycle. How convenient.

BLS folds missing PPI into January release

The Bureau of Labor Statistics said it will combine the delayed October wholesale‑price figures into the postponed November report in mid‑January as it works through the shutdown backlog.

The agency confirmed this is part of its broader effort to restore the normal FLOW of federal economic data after weeks of disruption.

The delay lands at a bad moment for the Fed, which is trying to judge inflation with old inputs. The PPI flows into the PCE, the central bank’s preferred inflation measure, and the absence of fresh producer prices makes it harder to read where costs are heading right now.

As officials took their seats for this week’s meeting, September remained the newest inflation baseline on hand.

While inflation data went stale, fresh clues on households came from the Federal Reserve Bank of New York. Its Survey of Consumer Expectations, published Monday, showed one‑year inflation expectations holding at 3.2% in November.

Expectations for three years and five years both stayed at 3%. At the same time, job fears eased. The perceived chance of losing a job dropped to 13.8%, the lowest point so far this year.

The labor mood also improved in other ways. Participants marked down the odds that unemployment will be higher a year from now. More people said they expect better chances of finding work if they do lose a job.

Yet not all signals were positive. With inflation still high and job security still weaker than last year, more families said their finances took a hit. The share of respondents saying their current financial position is worse than a year ago climbed to 39%, the highest level in two years.

Fed officials are still set to vote on Wednesday at the end of the two‑day meeting. A third straight rate cut is widely expected as the central bank tries to protect the labor market from further erosion. At the same time, several policymakers warned that tariffs could lock in higher prices for longer. One official said tariffs could lead to “long‑lasting price pressure,” a risk they continue to track through inflation‑expectation estimates.

Powell pushes rate cuts as dissent piles up

The expected decision comes as Jerome Powell, whose term as chair ends in May, faces rising resistance inside the central bank. Every rate reduction delivered this year drew at least one dissenting vote, and three officials are again expected to vote against the majority at this final meeting of the year.

The conflict is simple and brutal. Inflation is still too high, and the job market is losing momentum at the same time. The Fed has only one main tool to deal with both. Jerome, long known for holding the committee together, now struggles to balance those forces as unity slips.

Even with DEEP respect across the committee, the growing split raises questions for whoever takes over next. The next chair will inherit a table of 18 policymakers with sharper divisions than seen in years. While officials agree they want rates to fall toward a level that neither restrains growth nor fuels excess demand, they cannot agree on where that neutral level actually sits. That disagreement is now driving the rise in formal dissent.

The six weeks since the last meeting exposed the rift in public view. Some officials argued for more cuts to support a weakening labor market. Others pushed for a pause as inflation stayed stubborn. As those positions moved back and forth, market odds on a December rate cut swung with each speech.

The balance tipped when two officials closest to Jerome signaled they were ready to back another cut. Their public stance pointed to Jerome’s effort to pull more of the committee toward easing. Throughout his tenure, Jerome has often secured support by trading policy backing for changes in messaging after meetings. The Fed has long relied on consensus, using guidance language to smooth over disputes and keep markets steady.

That tradition is now under strain. This month’s gathering is set to become the fourth straight meeting with at least one dissenting vote. If three objections land again, the Fed will total eight dissents across four meetings, matching the entire count from the previous 47 meetings. That internal friction now unfolds as policymakers debate rates with missing PPI data, delayed inflation inputs, fragile households, and a labor market the Fed says it cannot ignore.

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