The Labor Department delivers an overdue snapshot of the U.S. job market Thursday. It's almost seven weeks behind schedule. And because the government shutdown delayed data-gathering, there won't be another one until mid-December.
While the information in the report is a bit stale, covering the month of September, it may offer some clues about the pace of hiring and firing this fall.
It comes after a sluggish summer of job growth, when employers added less than 30,000 jobs a month, on average. But if employers weren't adding a lot of new workers, they weren't handing out a lot of pink slips, either.
Federal Reserve governor Chris Waller worries that's about to change. Waller says his conversations with business leaders show the job market is close to stalling.
"Four to six weeks ago, we were still in this kind of no-hire/no-fire mode," Waller told a group of economists in London this week. "They're starting to talk about layoffs. They're starting to plan for them in the future."
Amazon recently announced 14,000 job cuts and Verizon is cutting 15,000 workers.
Waller wants the Fed to cut interest rates again when policymakers meet next month, to boost demand and prop up the labor market. But minutes from the last Fed meeting, released on Wednesday, show considerable disagreement among central bank policymakers.
Many members of the Fed's rate-setting committee suggested it would be appropriate to hold interest rates steady for the rest of the year, noting that inflation has remained stubbornly above the Fed's 2% target. That's partly due to President Trump's tariffs. And some Fed policymakers think the import taxes will continue to put upward pressure on goods prices well into next year.
Ordinarily, the Fed would have jobs numbers for October and November in hand before its next meeting. But because of the government shutdown, those reports won't be released until after the meeting, and some of the October data won't come out at all. It's also uncertain when or if the October inflation report will be published.
That said, Waller insists he and his colleagues are not flying blind. They've been listening to businesses like Target and McDonalds that say many of their customers are really cautious with their spending right now. That could put more of a squeeze on the job market.
"You just go talk with firms that work with low- and middle-income households, they'll tell you point blank, they're just not coming in the door," Waller said. "And then these firms are not going to be hiring."
While government data on consumer spending has also been held up by the shutdown, anecdotal reports suggest only the wealthiest families are spending freely these days, buoyed in part by the gains in their stock portfolios.
Thursday's report will also provide an update on the unemployment rate. The jobless rate in August was 4.3% — up from the beginning of the year but still quite low by historical standards.
The unemployment rate is driven by two forces: the number of jobs employers want to fill and the number of workers available to fill those jobs.
The administration's crackdown on immigration has limited the number of foreign-born workers, at the same time many native-born baby boomers are retiring. Some analysts argue that drop in the supply of workers is largely responsible for the slowdown in hiring.
Waller worries the slowdown is driven more by a declining need for workers, which could result in higher unemployment in the months to come.
"There's definitely a reduction of supply," he said. "But to me that is masking the reduction in demand and that's what I'm concerned about."
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