Episode 53: The ongoing federal government shutdown is disrupting the release of key economic data. Here’s what we do know:
- According to an ADP report, private employers cut 32,000 positions in September, the sharpest drop so far this year. Small businesses took the hardest hit, losing about 40,000 jobs.
- Unemployment edged up to 4.3% in August. Economists point to tariffs, tighter immigration rules and AI-driven restructuring as key reasons hiring has cooled.
- The Federal Reserve lowered interest rates by 0.25% in September, marking its first rate cut since December and signaling a shift toward a more accommodative monetary policy.
- In response to the rate cut, mortgage applications surged nearly 30% in mid-September, reflecting renewed consumer interest in home financing. But my mid-October they retrenched 1.8%.
- The average 30-year fixed mortgage rate dropped, providing a significant incentive for both new buyers and those looking to refinance.
- Consumer sentiment remains subdued, with the University of Michigan’s October showing of 55.0 essentially unchanged from September.
- Consumers remain concerned about weakening job prospects and inflation as the government shutdown continues.
For more information on the state of the U.S. Economy, including forecasts, watch all the episodes of the Economy Express series.
