US October CPI to Omit Annual Inflation Data Due to 2025 Government Shutdown
TREE NEWS reports: The US Bureau of Labor Statistics (BLS) will release the October Consumer Price Index (CPI) report on Tuesday, but it will not include the year-over-year change. The omission stems from the 2025 government shutdown, during which the agency was unable to collect a complete set of price data for the month and cannot retrospectively fill the gaps. As a result, the BLS lacks the necessary base-period data to calculate the 12-month change in both headline and core CPI for October. Real average hourly earnings year-over-year growth will also be withheld.
Typically, the annual inflation rate is the most closely watched gauge for the public and markets. In September, the year-over-year CPI stood at 3.7%. The absence of this figure means investors and analysts will not have the most intuitive official measure of annual inflation pressure. For the monthly data, economists expect October CPI to rise 0.3% month-over-month, with core CPI (excluding food and energy) up 0.2%.
Market Implications
The missing annual data complicates the inflation picture just as the Federal Reserve prepares for its December policy meeting. The Fed held rates steady last month in a 10-2 vote, with officials indicating that “accumulating more information” would help determine the appropriate stance of policy. The October CPI and the upcoming employment report are key inputs for the December decision.
Without the year-over-year figure, markets will have to rely on monthly changes and alternative data sources to gauge inflation trends. This could lead to increased volatility as investors parse fragmented information. Here’s how different asset classes might react:
- Stocks: Equities could see heightened volatility, particularly in rate-sensitive sectors like technology and growth stocks. If monthly CPI comes in hotter than expected, fears of prolonged tight policy could pressure valuations. Conversely, a softer print might fuel hopes of a pause, supporting stocks.
- Bonds: Treasury yields may react to the monthly figures and any hints about the Fed’s next move. The lack of annual data could amplify moves as traders adjust positions based on incomplete information.
- Crypto: Digital assets, often sensitive to macro liquidity and risk sentiment, could experience swings. A higher monthly inflation reading might strengthen the case for tighter policy, weighing on crypto, while a lower reading could boost risk appetite.
- Commodities: Oil and gold may respond to inflation expectations. Gold, as a hedge against inflation, could see demand if monthly data suggests persistent price pressures. Industrial metals might be more influenced by growth concerns.
- Currencies: The dollar could strengthen if inflation data supports a hawkish Fed stance, while a softer reading might weaken the greenback.
Why This Matters for Investors
The missing annual CPI figure underscores the importance of data integrity in policymaking. Investors should prepare for potentially larger market reactions to the monthly numbers and seek alternative inflation indicators, such as the PCE price index or market-based measures like TIPS breakevens. The Fed’s reliance on data means that any perception of incomplete information could delay policy decisions, adding uncertainty to the outlook. As the December meeting approaches, markets will be closely watching all available data to infer the future path of interest rates.
Key Takeaways
- October CPI will not include year-over-year changes due to incomplete data collection during the 2025 government shutdown.
- Monthly CPI is expected to rise 0.3%, with core up 0.2%, but the lack of annual figures complicates inflation assessment.
- Markets may face increased volatility across stocks, bonds, crypto, commodities, and currencies as investors digest fragmented data.
- Investors should consider alternative inflation measures and prepare for potential policy uncertainty ahead of the Fed’s December meeting.
