Outlook The recent government shutdown, which now appears to be ending1, has resulted in delays for several key federal data releases that we typically monitor. Despite this, many of the regional Federal Reserve Banks have continued to publish certain economic indicators. For example, the Weekly Economic Index from the Federal Reserve Bank of Dallas and the GDPNow Index from the Federal Reserve Bank of Atlanta have both remained available, and these measures currently suggest that economic activity continues to expand. However, some important weekly statistics—most notably, the Weekly Unemployment Claims report from the U.S. Department of Labor—have not been updated due to the shutdown. Fortunately, several private-sector data providers continue to release employment-related insights. For instance, Challenger, Gray & Christmas recently published its October Job Cut Report2, which indicated an increase in announced layoffs. Employers have announced approximately 1,099,500 job cuts so far in 2025, representing a 65% increase compared with the same period last year. While the pickup in layoffs is notable, overall consumer health appears relatively stable. Household balance sheets remain strong3, and broad economic activity continues to indicate moderate growth4. Given that consumer spending represents a significant portion of U.S. economic output, the resilience of the consumer sector remains an important area of focus. We continue to monitor developments in employment trends, consumer activity, and economic growth closely, as these factors play a critical role in shaping corporate performance and earnings potential.
. . .
The equity markets ended the volatile week lower amid investor concerns regarding the AI trade and valuations. Corporate earnings remain strong (surprising to the upside), and the correlation between AI spend and revenue growth is evident in the data, suggesting the pullback reflects stretched valuations and not changes in fundamentals. Volatility in several mega-cap technology stocks fueled most of the market’s move, as the top 10 stocks represent roughly 40% of the S&P 500’s market capitalization.5 While valuations are in the spotlight, the tech leaders have strong balance sheets (cash-heavy) and are raising guidance for profitability (supported by AI and core businesses). Aside from earnings, investors received a few data releases on the manufacturing and services industries, private payrolls, and consumer sentiment and expectations. The ISM Manufacturing headline score came in weaker than expected, with prices paid dropping. However, new orders and employment have improved.6 The ISM Services report showed improvement across three of the four categories, with higher prices paid.7 On Wednesday, the ADP private payrolls figure came in a bit better than expected, showing 42,000 new jobs added to the economy, rebounding from two months of weak hiring. The average wage growth for job stayers rose 4.5% and 6.7% for job changers, indicating wage growth remains stable. The data suggests a cooling but resilient labor market.8 On Friday, the University of Michigan's preliminary survey for November showed a drop in consumer sentiment and changes to inflation expectations, with the 1-year rate rising to 4.7% and the 5-year rate dropping to 3.6%.9 Important economic data for the week ahead includes CPI (Consumer Price Index) and PPI (Producer Price Index) inflation reports, jobless claims, and Fed speak. Federal data could be delayed due to the government shutdown.
[1] https://www.bbc.com/news/articles/cpd2p2eddnzo [2] https://www.challengergray.com/blog/october-challenger-report-153074-job-cuts-on-cost-cutting-ai/ [3] https://fred.stlouisfed.org/graph/?g=1MY6T [4] https://www.atlantafed.org/cqer/research/gdpnow [5] S&P 500 Constituents [6] ISM® PMI® Reports [7] October [8] ADP® Employment Report [9] Surveys of Consumers | 
