Breaking: December Fed Rate Cut Odds Fall as BLS Cancels October Jobs Report

The expectations of a rate cut in December could be over following the confirmation by the Bureau of labor Statistics (BLS) that it would not release the October jobs report. The market assimilated the update and traders had immediate change of expectations from the upcoming December 10 Federal Reserve meeting.

Gaps In Labor Data Makes December Rate Cut Decision Harder

The cancellation eliminates one of the key data points that Fed relies on when making policy decisions. Through an updated BLS calendar, the October Employment Situation report was cancelled entirely due to the 2025 government shutdown.

The agency declared that data regarding payroll and unemployment were not collected in October since no household survey was conducted. The Employment Situation report for November also got postponed.

It is now planned to be published on December 16, six days before the FOMC meeting in December. Previously, the BLS indicated that it was going to release the September jobs report before the new update on November 20.

The shift in timing would imply that the Fed will go to the December 10 meeting with no new labor information. Therefore, policymakers will not have hiring data for October nor the employment conditions in November before voting on interest rates. This adds confusion at a time when the central bank has specifically emphasized its data-dependent stance on numerous occasions.

Expectations of A Fed Rate Cut Dropped After The BLS Announcement

The expectations in respect of interest rates changed drastically as traders reassess the situation based on the new updates. CMFedWatch odds indicate that the odds of December rate cuts have dropped to approximately 33%. The markets give the probability of keeping rates at 3.75% to 4% to be nearly 64%.

In late October, Jerome Powell stated that there should less expectations on rate cuts before the year ends. There are new fewer chances of further rates by the Federal Open Market Committee (FOMC), which is what the market now expects.

James Lavish, former hedge fund manager, added that the lost jobs numbers probably eliminate any chance of a December cut. According to his argument, the Fed cannot afford to justify any change of policy without a new report on employment.