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The US monetary authority cut interest rates on Wednesday, representing the second reduction this year during economic turbulence stemming from the government closure and trade duties.

Move Arrives at Extraordinary Moment for Central Bank

The move to reduce the benchmark interest rate by a 0.25% to a range of 4% to 3.75% comes at an unprecedented moment for the central bank. The institution has been under significant strain to cut rates even with ongoing price increases.

Fed Statement Highlights Labor Market Changes

In a statement, the Fed said that the jobless rate had gone up but stays modest. “Employment growth have decelerated,” the statement notes. “Inflation has moved up and remains moderately high.”

Government Shutdown Complicates Central Bank’s Task

The continuing government stoppage, now among the lengthiest in American history, has also complicated the central bank’s task. Collection of important financial statistics has been indefinitely halted as staff at the BLS are on leave during the shutdown.

Data Gap Impacts Policy Decisions

The Fed usually studies BLS data to assess employment trends, such as the number of employment gains added to the economy and the current unemployment rate. The most recent employment data was released in the beginning of last month, before the shutdown, and provided a relatively bleak snapshot of the jobs market in August.

The number of jobs added to the market in the summer month was lower by over 100k since the earlier season, and joblessness crept up to four point three percent – the peak since three years ago.

Alternative Reports Show Ongoing Slowdown

Though the bureau was scheduled to publish September’s job market report in the start of last month, it suspended its release once the closure started. Employment data company a leading payroll processor indicated recently that the business segment cut 32,000 positions in last month, a sign that the employment landscape is still decelerating.

“Both the supply and demand for workers has declined quite sharply,” Fed chair the Fed chairman said earlier this month, a trend he had earlier attributed stems from immigration and tariff policies.

Inflation Report Shows Moderate Increase

Though the bureau’s employment data has been paused, the bureau still issued its inflation report for last month that indicated that prices are rising, albeit gradually. Costs rose 3% over the past twelve months, the highest since the start of the year. In spring, the yearly price increase was two point three percent, the minimum it has been since three years ago. The Fed’s target price increase is two percent.