With official data missing, the Fed and markets are flying blind on jobs and rates
The ongoing federal government shutdown has cast a long shadow over the United States labor market, leaving policymakers and mortgage professionals alike to navigate without the usual compass of official data.
For the second month in a row, the Bureau of Labor Statistics (BLS) failed to release its employment report, forcing the Federal Reserve and industry players to piece together the economic picture from a patchwork of private-sector and high-frequency sources.
“In this vacuum, alternative indicators have taken center stage. While less comprehensive and more volatile than official government releases, they collectively reinforce the view that the labor market is cooling, not collapsing,” First American senior economist Sam Williamson said.
Private payrolls rose by 42,000 in October, according to the ADP National Employment Report—a modest rebound after two months of losses, but still a far cry from the robust gains seen earlier this year.
Williamson pointed to a range of private and real-time indicators—jobless claims, online job postings, and models from the Chicago Federal Reserve—that together suggest a labor market losing steam but not in freefall.
“Job postings to Indeed slipped to four-year lows, suggesting companies are staying cautious about expansion. Private tallies of jobless claims, built from state-level data still being published, indicate that continuing claims are stable, but elevated enough to show it’s taking longer for unemployed workers to find new jobs,” Williamson said.
“Initial claims have crept up—likely reflecting temporary layoffs among federal workers—yet remain far from levels that would signal broad layoffs.
Meanwhile, real-time models by the Chicago Federal Reserve suggest the unemployment rate ticked up slightly to 4.35% in October, pointing to growing slack, but no urgent signs of crisis,” he added.
The lack of official data has also complicated the Federal Reserve’s policy calculus. After a second consecutive rate cut, Chair Jerome Powell warned that further easing is “far from” guaranteed. He added that the shutdown’s official data blackout has made it harder to judge progress on inflation and employment, strengthening the case for caution.
For mortgage professionals, the data blackout has kept the 10-year Treasury yield—and thus mortgage rates—on a knife’s edge, highly sensitive to any shift in market sentiment.
LeeCoye “LC” Parker of C2 Financial highlighted the toll of the government shutdown on rural borrowers, noting that frozen USDA loans are stalling deals and delaying homeownership for first-time buyers. https://t.co/ToymmXVFVv
— Mortgage Professional America Magazine (@MPAMagazineUS) October 28, 2025
“If labor market signals weaken further, markets are likely to price in more easing and mortgage rates could drift lower—modestly improving affordability—whereas firmer hiring or inflation data would raise the bar for another cut and keep rates elevated,” Williamson said.
As the shutdown drags on, the housing market’s path forward looks set to be shaped less by dramatic rate moves and more by gradual shifts in affordability and “life events” driving demand. Until official data returns, the fog over the labor market and the Fed’s next move will persist.
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