Weekly Economic Snapshot - Oct. 4th
📊 Weekly Economic Snapshot: October 4, 2025
As we step into the second week of October, the U.S. economy continues to navigate a complex landscape shaped by policy shifts, labor market dynamics, and global uncertainty. Here's a look back at the key developments from the past week and what to watch for in the days ahead.
🔙 Looking Back: September 30 – October 4, 2025
Labor Market Surprises
The labor market showed mixed signals. While nonfarm payrolls surged by 254,000 in September, beating expectations, ADP reported a surprising loss of 32,000 private-sector jobs. The unemployment rate dipped slightly to 4.1%, and wage growth held steady at 4.0% year-over-year.
Inflation & Fed Policy
Inflation remains sticky. The PCE price index rose to 2.7% YoY in August, the highest in six months. With tariffs set to increase on key imports like furniture and pharmaceuticals, inflationary pressures are expected to intensify. The Fed is signaling a cautious stance, with at least one more rate cut likely before year-end.
Markets Defy Gravity
Despite the first government shutdown in seven years, equity markets soared. The S&P 500 hit a record high of 6,711.20, and gold prices surged past $3,800 per ounce. Investors appear to be betting on aggressive Fed easing and a soft landing scenario. Additionally, cryptocurrency sentiment appears to be at an all time high with Bitcoin reaching a new all time high this week.
🔮 Looking Ahead: October 7 – 11, 2025
Growth Outlook: Below Trend
Forecasts for Q4 suggest continued below-trend growth. S&P Global expects GDP to grow just 1.5% quarter-over-quarter, down from 2.5% in 2024. High-tech investment remains a bright spot, but tighter immigration and a frozen housing market are headwinds.
Fed’s Balancing Act
The Federal Reserve is expected to prioritize employment over inflation in the near term. Two more 25-basis-point rate cuts are anticipated before year-end, with another 50 basis points of easing projected for 2026.
Consumer Sentiment & Spending
Real disposable income growth is slowing, and consumer pessimism persists amid inflation and job security concerns. The Fed’s next moves will be closely tied to upcoming data on retail sales and consumer confidence.
📝 Final Thoughts
The U.S. economy is showing resilience in the face of policy uncertainty and global headwinds. While markets remain optimistic, the underlying data suggests caution. The coming week will be pivotal in shaping expectations for Q4 and beyond.