I don’t recall ever having to visit WhiteHouse.gov for any “announcements” or “facts” before this year.
The week began with faint optimism that October’s data would confirm a soft landing. Instead, it delivered another reminder that inflation is sticky and the labor market is cracking. Private indicators showed the largest monthly layoff total in over 15 years, led by Amazon and Target. ADP’s +42k headline gain did little to change the story. Official reports remained frozen as the government shutdown stretched past forty days, leaving investors to piece together an incomplete picture that looked increasingly fragile.
The macro data slate stays thin. Tuesday’s NFIB Small Business Optimism Index is expected around 98.2, down from 98.8, reflecting growing unease among small firms about tariffs and financing costs. Inflation pressures remain, while hiring and expansion plans soften. Combined with October’s private payroll stagnation and record layoffs, the backdrop points to a labor market losing traction but not yet breaking.
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Meanwhile consumer sentiment is really bad
which is at odds with corporate earnings (doing well), but the layoffs have been pretty significant lately esp in Big Tech.
troubling signs for lower- to middle-income Americans already experiencing recession-like conditions through struggles with daily expenses. Consumer sentiment among the lowest third of households by income sits below levels seen during the 2008 to 2010 financial crisis, while the next third mirrors those conditions, and overall sentiment remains sharply down from pre-pandemic levels.
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Things definitely do not appear more affordable than a year ago for most people (and potentially about to get worse for some with lower ACA subsidies).
In addition, with sluggish job market (downward pressure on wages), the outlook for wages to outpace inflation in the coming months is rather dim for most people. Combined with inflation >3%, not too surprising that sentiment would be pretty low.
What’s interesting also is that for all the talk about bifurcating economy (high incomes vs low-income) sentiment is pretty uniform across income tiers:
Not directly related to inflation but potentially important:
Here in Silicon Valley California it is about $4.50 per gallon.
Fed cuts another 25 basis points. Sees more cuts in the future:
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