(Reuters) -The U.S. unemployment rate likely was 4.3% in September, unchanged from August, according to a new “real-time” estimate from the Federal Reserve Bank of Chicago published on Thursday.
It was only the second time the regional Fed bank has published its new metric, which is based on the government’s Current Population Survey as well as data from non-government sources such as the online job site Indeed and Google.
It is planned for release twice a month and is designed to give policymakers an early sense of a key labor market statistic rather than substitute for it.
But with Friday’s publication of the official monthly U.S. employment report from the Bureau of Labor Statistics now delayed indefinitely by the 15th government shutdown since 1981, the regional Fed bank’s estimate may take outsized significance as central bankers weigh their next move on interest rates.
“The data dogs are howling because we are not getting our usual supply of information,” Chicago Fed President Austan Goolsbee told Marketplace Radio on the eve of the report’s release. “The best number is the BLS number, but if we don’t have that, we’re going to use the Chicago Fed number and other numbers.”
The Fed last month cut its policy rate by a quarter of a percentage point after job gains slowed sharply and the unemployment rate ticked up in August.
Policymakers have said they are concerned that once the labor market starts to weaken, it can do so suddenly, and they have framed their September interest-rate cut as a form of insurance against such an outcome.
The Chicago Fed’s unemployment rate forecast suggests that a rapid deterioration is not, for now, underway.
The hiring rate for unemployed workers dipped slightly and the rate of layoffs and other job separations rose a bit, but neither move was big enough to put more than “limited upward pressure” on the unemployment rate forecast, the bank said.
Financial markets continue to reflect heavy bets on quarter-point rate cuts at the Fed’s next two meetings, in October and December.
(Reporting by Ann Saphir; Editing by Jamie Freed)
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