Lingering effects from the government shutdown continue to blur economic analysis, but two reports scheduled this week will provide markets with some much-needed clarity on how the fourth-quarter is unfolding.
November reports from the government for payrolls (Tues., Nov. 16) and consumer inflation (Thurs., Nov. 18) will be closely read and possibly dispense market-moving releases. In the best-case scenario, the numbers will show that hiring is stabilizing if not rebounding, while inflation, if not easing, isn’t trending up. Economists, however, are expecting results that support the recent narrative of a weakening labor market and inflation that’s ticking higher, moving further above the Fed’s 2% target.
The consensus forecast calls for hiring to slow sharply in November to +40,000, down from 119,000 in September, according to Econoday.com’s survey results. (The October payrolls release from the Labor Dept. is reportedly lost to the complications related to the government shutdown, although several private estimates indicate a loss in jobs at companies.)
Debate is simmering about whether slower hiring is related to a weaker economy, the effects from policy changes related to immigration, or both. “The aging population and restrictive immigration policy are weighing on labor supply,” says KPMG US senior economist Matt Nestler. “The result is a much lower break-even number of payrolls each month [the number needed to keep the unemployment rate unchanged]. Expect low payroll gains in the monthly jobs report,” he adds.
Whatever the reason, ADP’s chief economist, Nela Richardson, predicts that the labor market will remain weak for the near term. After her firm reported that the private sector cut jobs in November, she told Fortune last week:
“We’re tracking changes in real time—it’s as high-frequency as payroll data [can] get, and we have not seen this rosy picture for 2026 in the data [relative to Wall Street’s optimistic outlook]. I think [when people] point to an improved labor market next year, they’re highlighting a couple of things in the macro economy, while we’re looking at this very granular dataset of private employment.”
On Thursday, the government will publish consumer inflation data for November, which is expected to tick up to 3.1% year-on-year from 3.0% in September, according to Econoday.com.
The main concern is that a degree of stagflation weighs on the economy. “If the labor market continues to soften at the margin, inflation stays sticky, and affordability doesn’t improve, consumption might look less robust in 2026 compared with 2025,” advise analysts at the Schwab Center for Financial Research strategists.
The good news is that a solid tailwind was blowing in the third quarter, based on the Atlanta Fed’s latest nowcast (Dec. 11) for the upcoming Q3 GDP report scheduled for Dec. 23. Output is expected to rise at a strong 3.6% annualized pace, down slightly from Q2’s increase.
The analysis for Q4, by contrast, is relatively uncertain at best and, by some accounts, vulnerable to softer economic conditions.
Even if the incoming numbers are better than expected, the interruption of the government’s data collection during the shutdown will continue to muddy the waters.
“It may take until December data is released in January to feel confident regarding whether inflation is cooling toward target or stuck at elevated levels,” says Andrew Hollenhorst, chief economist at Citi.
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