Richmond Fed's Barkin Highlights Inflation Assessment Challenges Amid Data Gaps From Government Shutdown

Thomas Barkin, Richmond Fed President, emphasized on Nov 18, 2025, the challenges of assessing inflation and guiding monetary policy without official government data (due to an ongoing federal shutdown). The shutdown disrupted core data collection—67% of CPI data relies on in-person visits, leading to missing October CPI/PPI reports [3]. Barkin compared operating without official data to navigating a boat without a lighthouse [1]. To fill gaps, the Fed uses private data (e.g., PriceStats for inflation) and direct outreach (4,000 business/community meetings in 2025) [1,4]. As of September, headline CPI was 3% (above the 2% target), with shelter easing but goods/services pressure persistent [1]. Labor market trends are mixed: soft job growth (ADP 42k Oct jobs) but slowing supply (0.3% annual growth projected) mitigating unemployment risks [1]. Policy-wise, Barkin stated the Fed would “throttle back” actions until data visibility improves, signaling a likely hold in December [1].

• The shutdown’s impact on in-person data collection creates significant gaps, forcing the Fed to rely on less transparent private sources (e.g., PriceStats) which limits market clarity [3,4].
• Barkin’s outreach captures nuance missing from aggregated data—consumers trading down (private labels, repairs over replacements) to push back on price hikes [1].
• Labor supply constraints (aging workforce, declining immigration) mean slower job growth may not translate to higher unemployment, altering traditional policy responses [1].

• Risks
  : Business uncertainty delays investment/hiring; market volatility increases as investors rely on alternative data; prolonged data gaps could erode Fed credibility [1,4].
• Opportunities
  : The Fed’s outreach efforts may provide more granular insights into consumer/business behavior; private data sources could offer real-time inflation tracking (though not public) [1,4].
• Urgency
  : The December FOMC meeting is approaching, so resolving the shutdown to restore official data is critical to avoid policy paralysis [1].

• Event Context
  : Barkin’s speech on Nov 18, 2025, addressed inflation assessment challenges amid a federal shutdown disrupting official data (October CPI/PPI missing) [1,3].
• Alternative Sources
  : Private data (PriceStats) and direct outreach (4k meetings) are used to fill gaps [1,4].
• Inflation/Labor Stats
  : September CPI 3% (above target); October ADP jobs 42k; labor supply growth 0.3% annually [1].
• Policy Implication
  : Fed likely to hold rates in December until official data is available [1].