Federal Reserve officials are officially flying blind as a government shutdown precluded Friday’s release of a key monthly jobs report, arguably the most important data needed to make a decision about the future path of monetary policy at a meeting later this month.

But markets don't appear to be concerned that unanswered questions about the health of the US labor market will knock the central bank off course for two expected rate cuts by the end of the year.

Traders are pricing in a nearly 97% chance the Fed cuts rates by another quarter percentage point to 3.75% to 4% at its next meeting on Oct. 28-29. They also are predicting another quarter point cut at the last Fed meeting of 2025, on Dec. 9-10.

What Fed policymakers will have to do in the absence of key government data is rely on private sector information, along with anecdotal evidence and surveys of business owners that many regional Fed offices conduct.

And thus far that private data have shown a continued slowdown in payroll growth, which would support the case for more cuts.

One example came this past Wednesday when payroll firm ADP reported Wednesday that private payroll employment fell by 32,000 last month.

Another came from the Indeed Job Postings Index, a real-time view of hiring demand based on millions of job postings, which showed that the labor market cooled further in September — continuing the softening trend observed in recent months.

As of September 26, overall job postings on Indeed were still up 2.9% from pre-pandemic levels but down 2.5% from the month prior.

Its data also revealed a broad-based slowdown in hiring across sectors; off the 45 professional sectors tracked by Indeed, banking and finance was the only one in which postings grew year-over-year.

The Indeed Wage Tracker, sourced from advertised salaries in job postings, also shows that annual wage growth has slowed consistently throughout the year, and is currently growing more slowly than the annual pace of inflation.

“Right now, we’re dealing with a stagnating labor market, cost increases, and a transformative new technology," said Andy Challenger, senior vice president and labor expert for outplacement firm Challenger, Gray & Christmas.

"With rate cuts on the way, we may see some stabilizing in the job market in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring.”

Challenger, Gray & Christmas said U.S. employers announced 54,064 job cuts in September, 37% lower than in August. And employers are planning layoffs in the third quarter at the highest rate since 2020.

It’s very likely that job cut plans are going to surpass 1 million for the first time since 2020, Challenger added.

Despite the abundance of private information on jobs, not having key government data creates more uncertainty around Fed officials’ decisions.

“Reliable federal data, especially related to price levels and inflation, is hard to replace, and there are no perfect substitutes,” said Cory Stahle, Senior economist at Indeed.

“Businesses, job seekers, and policymakers lean heavily on data to make decisions during periods of uncertainty, and the delayed release of September’s national jobs data is only deepening the uncertainty that has defined the economy this year.”

Senator Elizabeth Warren called on President Trump to release the jobs report since the data have already been tallied and it’s just a matter of releasing it.

“Let’s be clear: the jobs data scheduled to come out this Friday has undoubtedly been collected and the President must release it,” said Warren.

“Without it, the Federal Reserve will not have the full picture it needs to make decisions this month about interest rates that will impact every family across the country. Donald Trump has the power to make sure the federal government can continue producing and releasing this critical information on Friday and beyond during his shutdown.”

The Fed remains divided over how much emphasis to place on a slowing labor market over risks of higher inflation.

Some members, including Kansas City Fed president Jeff Schmid and Chicago Fed president Austan Gooslbee, are comfortable with the one cut for now as a risk management step before rushing to cut further.

Goolsbee told CNBC Friday he is leery of cutting interest rates too quickly as threats increase both inflation and employment.

“I’m a little wary about front-loading too many rate cuts and just counting on the inflation going away,” he said.

On the flip side, Fed Governor Michelle Bowman said last week that the Fed is at serious risk of being behind the curve in addressing what she called a “deteriorating labor market,” while Fed Governor Stephen Miran has called for five more cuts this year and another jumbo-sized rate cut at the next meeting.

Some are making guesses as to what the Bureau of Labor Statistics might have reported today if the government had not shut down.

Workforce intelligence firm Revelio Labs showed a 60,000 gain in jobs for September and estimated that the government would have reported 38,000 jobs were added in the month of September.

Economists have estimated 50,000 jobs were added in the month of September, which would mark an increase from the paltry 22,000 created in the month of August, with the unemployment rate holding steady at 4.3%.

The Chicago Fed Real-Time Unemployment Rate Forecast also estimates the BLS unemployment rate at 4.3% for September, unchanged from August.

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