October 2025

Truist Economic Roundup

Keep up with the latest economic data and headlines from Truist.

Our take

Fed eyes next moves amid mixed signals and delayed government data

As the government shutdown drags on, businesses, markets, and policymakers are deprived of many of the key economic metrics they’re accustomed to following. Government-sourced data is the best available in many cases and the only source in others. For instance, labor and productivity data, inflation indicators tracking consumer and producer prices, housing metrics, and personal income and spending are all delayed by the shutdown.

The only exception will be the Consumer Price Index (CPI) report that will be released on October 24th ahead of the Federal Reserve’s (Fed) October 28-29 meeting. But the Fed is hardly the only entity waiting for data—Social Security and Medicare Part B premiums for 2026 depend on the third quarter CPI data as do governments and businesses setting COLAs for pensions and contracts. The Fed lowered its benchmark rate a quarter point in September and expects two more quarter-point rate cuts before the end of the year.

In the absence of those traditional metrics, folks are straining to glean clues from other sources to fill in the gaps. For example, there are several alternate employment data sets, including from private payroll processors such as ADP and Paychex, workforce intelligence firm Revelio Labs, and Carlyle Group, among others; however, each paints a decidedly different picture of the labor landscape. Moreover, each have their own shortcomings compared to the Bureau of Labor Statistics (BLS); most notably, smaller sample sizes and dramatically narrower geographic scopes.

Nonetheless, our business contacts continue to share anecdotes of subdued job growth, with many firms remaining in a 'low hire/low fire' stance amid ongoing tariff uncertainty and broader economic sluggishness

Consumer sentiment continued its slide for the third straight month and is at its lowest level since May. Inflation worries persist, although one-year expectations dropped slightly to 4.6%. Consumer sentiment aligns with the BLS data reported last month showing inflation is running hotter in August at 2.9% annually. Tariffs likely contributed to rises in manufactured goods including auto parts, tires, and home furnishing along with imported food. We’ll soon see whether the lift in non-farm productivity observed in August can help quell inflationary pressures.


Bottom line:

The U.S. economy continues to muddle through. We’re hopeful that the economy is stabilizing and anticipate a modest growth reacceleration in 2026, supported by certainty in tax policy, further clarity on tariffs, and lower interest rates. We expect that the Fed will likely proceed cautiously until there’s more evidence of where the economy is heading, a challenge given the government-sourced economic data embargo.

Positive

GDP*: Revised up to 3.8% as consumer spending added 0.5 percentage points compared to the prior release. But overall growth during the quarter was boosted by a massive decline in imports, which won’t last.Disclosure 1

Wages: Back-to-back 0.4% increases and up 3 months in a row.Disclosure 1

Apartment rental prices: Rent index rose 0.2% (0.18%) MoM in August, below the pre-pandemic 5-year average of 0.3% for August. Also, rents are up 2.7% from a year ago, below the pre-pandemic 5-year average of 4.3%.Disclosure 2

Stock and bond markets: The S&P 500 rose by approximately 3.5%, marking its strongest September in 15 years.Disclosure 3 10-year U.S. Treasury bond yields nearing 4% on new tariff threats. Rate volatility should persist.Disclosure 4

New-vehicle affordability: New-vehicle affordability was stable in August. The number of median weeks of income needed to purchase the average new vehicle was steady at 36.8 weeks.Disclosure 5

*Indicators marked with an asterisk are impacted by the U.S. federal government shutdown. Jobs data not released due to government shutdown.

Negative

Federal funds rate: The Fed cut rates in September and sees two more cuts in 2025. Markets now expect another quarter-point rate cut in October.Disclosure 6

30-year fixed mortgage rate: Fell WoW, halting a two-week rise. Higher rates reduce affordability.Disclosure 7

Manufacturing: Contracted for a seventh month. The prices paid component ebbed for fourth time in 5 months but is still elevated and signals prices are rising.Disclosure 8

Housing*: Existing home sales fell 0.2% MoM down for the fourth time in the past six months. New home sales jumped 20.5% MoM, but July was revised downward to -1.8% from -0.6%.Disclosure 9 New housing starts dropped 8.5%. New housing permits fell 2.3%.Disclosure 10

Consumer sentiment*: Fell for 3rd month in a row to lowest since May. Inflation worries remain elevated, but one-year expectations down to 4.6%.Disclosure 11

*Indicators marked with an asterisk are impacted by the U.S. federal government shutdown. Jobs data not released due to government shutdown.

Neutral

Services: Activity was stagnant (not expanding or contracting). The prices paid component rose to 69.4, still near the highest reading since October 2022.Disclosure 8

Inflation*: Consumer prices (YoY CPI) rose to 2.9%. YoY producer prices (PPI) cooled to 2.6%.Disclosure 12

Business Inventories*: Increased for the first time in three months.Disclosure 10

Back to office: Fell to 54.0, a four-week low (pre-pandemic indexed to 100). The trend has improved and appears to be slowly grinding higher, but remains about half of pre-pandemic levels, which is a modest positive for overall growth.Disclosure 13

*Indicators marked with an asterisk are impacted by the U.S. federal government shutdown. Jobs data not released due to government shutdown.

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