Economists Slam November Inflation Data as ’Unreliable’—Government Shutdown Blocked Real Collection

Trust in the official numbers just hit a new low. Economists are calling foul on the latest inflation report, arguing the recent government shutdown completely compromised the data. Without real-time collection, the figures are essentially a guess—and Wall Street is trading on it.

The Data Blackout

When federal offices went dark, so did the flow of critical price information. The usual methods—direct surveys, on-the-ground collection—got blocked. What’s left is a patchwork of estimates and stale data, dressed up as an official report. It’s a stark reminder that the system’s gears can grind to a halt, leaving everyone in the dark.

A Credibility Crisis

This isn’t just a technical glitch. It’s a direct hit to the credibility of the entire economic dashboard. Policymakers at the Fed, investors betting on rate cuts, businesses planning their budgets—they’re all making multi-billion dollar decisions based on what might be fictional numbers. It’s the financial equivalent of flying blind with a broken altimeter.

Markets Hate Uncertainty

Predictably, the ‘unreliable’ tag triggered instant volatility. Traders despise ambiguity more than bad news. When the foundational data is suspect, every asset price gets a question mark. It’s the perfect environment for knee-jerk reactions and speculative swings—another gift from the legacy system to the hedge fund casino.

The takeaway? When traditional data pipelines fail, the flaw in the model is exposed. It’s almost enough to make you appreciate a transparent, immutable ledger—you know, the kind that doesn’t take a federal holiday.

Economists question data after shutdown limits real collection

Michael Hanson at JPMorgan said the softer readings “suggest that the BLS may have held fixed a number of prices it was not able to collect in October, which likely means a material downward bias in the current numbers that will be reversed in coming months as full price collection resumes.”

Diane Swonk at KPMG US warned that “because it was a shortened survey month, you’ve got to take it with a grain of salt.” She said, “Things that should be going up are going down, and things that should be going down are going up. So it’s confusing, and it doesn’t quite square with prices that we’ve observed.”

Markets reacted with their usual mood swings. Yields on short-term government debt dipped after the report, which pushed prices higher, but the MOVE faded fast. The two-year Treasury yield touched a two-month low of 3.43% before snapping back.

Stocks, on the other hand, opened strong. The S&P 500 ROSE 0.9% and the Nasdaq jumped 2.4%. But traders did not fully trust the numbers. Jon Hill at Barclays said, “Markets don’t care because the data doesn’t pass the smell test.”

He added, “Given the lack of explanation about how the BLS made these decisions, it’s hard to take at face value. Because it was such a big miss, and because it’s so hard for the market to take the data literally, investors don’t want to bet the house.”

Political pressure builds as Fed officials debate next rate move

The stubborn path of inflation in recent months had already become a political headache for President Donald Trump. Voters have been frustrated by the squeeze on living costs. So the WHITE House jumped on the softer report.

Kevin Hassett, now leading the National Economic Council and seen as a top contender to run the Federal Reserve, said, “I’m not saying that we are going to declare victory yet on the price problem, but this is just an astonishingly good CPI report.”

Trump used the moment to push again for faster rate cuts and kept attacking Fed chair Jay Powell, calling him a “moron” over what he sees as slow action. But analysts said the questionable data may not sway the central bank much.

The Fed voted last week to cut borrowing costs to a three-year low after a tense meeting. Some policymakers said faster cuts risk fueling inflation, while others argued weak labor conditions justified more support.

Kansas City Fed chief Jeff Schmid and Chicago Fed head Austan Goolsbee warned against easing too much because of inflation risks. Fed governor Stephen Miran pushed for a 0.5-point cut instead, saying “phantom inflation” was steering the Fed in the wrong direction and that the real underlying rate was far lower.

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