U.S. Labor Dept. Merges October PPI Data, Leaving Fed and Markets in the Dark

The U.S. Department of Labor's Bureau of Labor Statistics (BLS) has made an unusual decision to skip the release of the October Producer Price Index (PPI) report entirely, opting instead to merge that data into the delayed November report, now scheduled for January 14, 2025. This move, attributed to the cleanup from a recent government shutdown, has created a significant data gap for the Federal Reserve just as it convenes for its December policy meeting.

The timing is critical. The PPI is a leading indicator of wholesale inflation and feeds directly into the Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge. With the October data missing and November's report postponed, Fed officials are left to make pivotal interest rate decisions relying primarily on September inflation data, despite current economic conditions showing sticky inflation and growing job market risks.

Market analysts have raised immediate concerns about transparency and the potential for increased volatility. The lack of clear, timely data complicates economic forecasting and undermines the reliability of indicators used by regulators, businesses, and investors. This uncertainty directly impacts risk assets, including cryptocurrencies like Bitcoin and Ethereum, as traders speculate on the implications for monetary policy.

Amidst this data vacuum, the Federal Reserve Bank of New York's Survey of Consumer Expectations showed one-year inflation expectations holding steady at 3.2% in November, with longer-term expectations at 3%. While perceived job loss risks eased to a yearly low of 13.8%, a concerning 39% of respondents reported their financial situation is worse than a year ago—the highest level in two years.

The Fed is widely expected to deliver a third consecutive rate cut at its December meeting in an effort to protect the labor market. However, Chair Jerome Powell faces rising internal dissent, with at least three officials expected to vote against the cut. This meeting is set to be the fourth in a row with dissenting votes, highlighting a deep policy rift within the committee as it navigates missing data, delayed inputs, and a fragile economic landscape.