Nowcasts to the rescue as US government shuts down

The US government shutdown (which had been underway for more than a week at the time of publication, and is the third such event in 12 years) provides another use case for CEIC's proprietary nowcasts, which tap various high-frequency indicators to "predict the present."

With Republican and Democrat lawmakers deadlocked over spending plans, the closely watched nonfarm payrolls report has been delayed; inflation data will also likely be postponed. This could potentially deprive market participants of crucial data points ahead of the Federal Reserve's next policy committee meeting at the end of October.

As Fed officials wrestle with whether to cut rates again before the end of the year, our nowcast is projecting somewhat positive trends for both inflation and the job market.

Our first visualization compiles various inflation measures, comparing our nowcasts to the last reading. They generally show price increases to be relatively range bound, though there appears to be a notable moderation in core personal consumption expenditure (PCE) inflation.

Recent weekly readings for our machine learning-based NFP nowcast suggest the US economy is still adding jobs, but at a considerably slower pace than it was earlier in the year -- as our second chart shows. For the unemployment rate, our nowcast suggests a slight tick downward from the last reading of 4.3%.

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