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The United States central bank reduced interest rates on Wednesday, marking the second rate cut in the current year amid economic turbulence originating from the federal government shutdown and trade duties.

Decision Arrives at Extraordinary Time for Federal Reserve

The move to reduce the key 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 lower borrowing costs even with persistent inflation.

Central Bank Announcement Highlights Labor Market Changes

In a statement, the Fed stated that the unemployment rate had increased but remains low. “Employment growth have decelerated,” the release notes. “Inflation has moved up and remains somewhat elevated.”

Government Shutdown Hinders Central Bank’s Task

The ongoing federal government shutdown, now among the lengthiest in American history, has also complicated the Fed’s job. Gathering of important economic data has been indefinitely halted as employees at the BLS are furloughed during the closure.

Information Shortage Impacts Policy Decisions

The Fed typically studies BLS data to assess labor market conditions, including the number of new jobs created to the market and the current unemployment rate. The last jobs report was published in early September, before the closure, and provided a relatively bleak snapshot of the jobs market in the previous month.

The number of positions created to the market in the summer month was down by more than 100,000 since the spring, and unemployment crept up to 4.3% – the highest since three years ago.

Alternative Reports Indicate Continued Decline

Though the bureau was scheduled to publish last month’s job market report in the start of last month, it suspended its release when the shutdown began. Private payroll firm ADP reported recently that the private sector cut 32,000 jobs in September, a indication that the job market is continuing to slow.

“Both the supply and demand for labor has fallen significantly,” Fed chair the Fed chairman said earlier this month, a trend he had previously said stems from trade and immigration measures.

Price Data Shows Gradual Increase

Though the bureau’s employment data has been suspended, the bureau still issued its price statistics for September that showed that prices are rising, albeit gradually. Costs increased three percent over the last year, the peak since January. In spring, the yearly price increase was 2.3%, the minimum it has been since three years ago. The central bank’s goal inflation rate is two percent.