Fed Loses Access to Private Jobs Data
The Federal Reserve has lost access to a crucial dataset that provides insights into the US job market. The dataset, provided by payroll-processing company ADP, includes anonymized information on employment and earnings for millions of workers, covering 20% of the nation’s private workforce. This data was previously available to the Fed with a roughly one-week delay, making it a timely and comprehensive gauge of job-market conditions.
Impact of Lost Data
The loss of access to this data is significant, especially during the ongoing government shutdown, which has already disrupted the Fed’s ability to receive US economic statistics. The ADP data was a valuable tool for the Fed, providing a unique perspective on the job market that complemented other economic indicators.
Recent Economic Developments
Despite the loss of access to the ADP data, other economic indicators suggest that the US economy is still growing. The Chicago Fed’s survey of economic conditions showed that economic growth was above trend in October, with an acceleration from a lagging rate in September. Manufacturing activity and non-manufacturing activity both jumped month-over-month, per the survey.
International Economic News
Overseas, Indonesia’s central bank surprised markets by leaving interest rates on hold, pausing after three consecutive cuts as it keeps an eye on the rupiah. Meanwhile, South Korea’s central bank held its policy rate steady for a third straight meeting, reflecting caution over financial-stability risks and uncertainty over tariffs.
Housing Market Trends
In the housing market, the Mortgage Bankers Association’s latest forecast anticipates fixed 30-year mortgage rates hovering above 6% while home prices nationally stagnate over the next two years. This could lead to a more favorable market for buyers than sellers, as buyers who aren’t pushed to the sidelines from job market softening should have an easier time.
Global Economic Trends
Globally, there are signs of shifting economic trends. Canada’s Prime Minister has announced plans to take "bold" risks to rekindle growth in an economy struggling under the strain of tariffs. Meanwhile, China’s top leaders have vowed to double down on making the country technologically self-sufficient, a policy priority that has taken on more urgency as the rivalry with the US intensifies.
Labor Market Trends
In Japan, the largest union group plans to seek a pay increase of at least 5% at next year’s annual negotiations, a welcome sign for the central bank as it looks for steady wage growth to gauge the timing of rate hikes. This would mark the third straight year that the Japanese Trade Union Confederation has requested a more-than 5% wage increase.
Conclusion
In conclusion, the loss of access to the ADP jobs data is a significant blow to the Federal Reserve’s ability to gauge the US job market. However, other economic indicators suggest that the US economy is still growing, and global economic trends are shifting in response to changing policies and priorities. As the global economy continues to evolve, it will be important to monitor these trends and adjust policies accordingly to promote sustainable growth and stability.
