US Economic Reports - Fed's Focus Before FOMC ?
@JC888：
For the last week of November 2025, a mix of delayed & up-to-date reports were released. It’s the latest glimpse into US economy before the Fed convenes the following week, on Dec 9 -10. Below is a recap of the reports. US Retail Sales (MoM). The September 2025 report showed sales increased by a disappointing 0.2%. It has fallen significantly short of market forecast of a 0.4% rise. And has fallen sharply from August 2025’s 0.6% growth. Total sales reached $733.3 billion,that’s a +4.3% YoY growth. Control Group sales, that exclude volatile categories and feed into GDP calculation, actually declined by -0.1%. This implies underlying consumer spending may be weaker than headline number suggests. Producer Price Index (PPI). For September 2025, US producers MoM inflation rose across the board except for core PPI (YoY) report. (see below) Headline MoM inflation rose the most by +0.4%; while core MoM inflation rose by +0.2%. Headline YoY inflation was flat at 0.0% for Sep 2025. Core YoY inflation fell by -0.3%, compared to Aug 2025’s data; presenting a favourable sign for US economy. The “excluded” volatile components’ data suggests underlying, structural inflationary pressures in US economy are easing. This should be viewed positively by the Fed as it indicates that price increases outside of temporary commodity swings are moderating. Overall, September 2025 producer inflation presented a mixed signal. Short-Term Volatility: The jump in both MoM reports, suggest that certain sectors, particularly those exposed to Energy & Food price swings, faced renewed cost pressures back in September. This implies that businesses in those areas may soon raise prices for consumers. Long-Term Trend: At the same time, slowdown in Core PPI YoY to +2.6% indicates that the broader, underlying trend of producer inflation is cooling. Consumer Confidence. For November 2025, Conference Board’s Consumer Confidence Index tumbled sharply, dropping to 88.7 (its lowest since April 2025), amid increasing concerns over US economy. Consumers growing pessimism regarding (a) current job market conditions and (b) their short-term outlook for income and business, citing persistent worries about creeping inflation, tariffs, and recent government shutdown. This broad-based decline signals rising economic anxiety, suggesting that consumer spending, while resilient, may face significant headwinds as the year concludes. US Jobless Claims. Weekly Jobless Claims. For week ended 22 Nov 2025, US weekly jobless claims unexpectedly fell by -6,000 to a 7-month low of 216,000. (see above) This ran counter to market expectations of a fall to 226,000 from previous week’s claims of 235,000 (before revised downwards). Report confirmed that US employers are continuing to hold onto their workers. Continuing Claims. Unfortunately, the same could not be said for continuing claims for week ending 15 Nov 2025. It rose by +7,000 claims from previous week’s readings, to 1.960 million. It is the highest level since 2021. Overall, the two reports indicate the US labour market is in a "low-firing, low-hiring" state. Current job holders are “secure”, while those who are already unemployed are finding it increasingly difficult to secure a new job. Fed’s Dec Interest Rate Cut ? Looking at above US reports, the US economy is stagnating on a monthly basis. For the first time in a long time, FOMC will convene without hindsight to country’s latest inflation numbers. Strangely enough, US market & investors alike are ‘confident’ that US central bank will cut interest rate in December before the year is over. During November 2025 socializing, following Fed members have made known their preferences supporting or dissenting, an interest cut in December 2025. Yes, To Cut. John Williams - gave the strongest public endorsement, stating he sees "room for a further adjustment in the near term" to move policy closer to neutral due to rising downside risks to employment. Christopher Waller - explicitly said, "I'm advocating for a rate cut at the next meeting," citing (a) a still-weak labour market and (b) low probability of an inflation rebound. Mary Daly - reportedly signaled support for lowering interest rates at the December meeting, aligning with the dovish shift. No To Cut. Jerome Powell - (during post October 2025 FOMC conference) cautioned that a further reduction in the policy rate at the December meeting is "not” a forgone conclusion and is "far from it." Jeffrey Schmid - stated that it would be "hard” to support cutting again (a) without much better inflation news and (b) worried that more easing would entrench higher prices. (Incidentally, Schmid also dissented against the October cut). Susan Collins - signaled that she likely will oppose a further rate cut in 2025, viewing current monetary policy as appropriate for the time being. Michael Barr - expressed caution, noting inflation is still around 3% and the Fed needs to be "careful & cautious” now to ensure both sides of the dual mandate are met. CME Fedwatch Tool As of late November 2025, the CME FedWatch Tool shows an 87% probability that the Fed will agree to a final -0.25% interest rate cut on 10 Dec 2025. This high market expectation was solidified by recent dovish statements from key FOMC voters (see above). My viewpoints: (mine only) This is what I think will happen to US market if the -0.25% interest cut goes ahead. US market reaction will be complex. This is because the highly anticipated cut (as per CME FedWatch tool) has been largely priced into the market already. What remains ‘unknown’ and key driver of volatility will be Fed's: Accompanying statement during post meeting conference. Fed’s forward guidance (what they signal for 2026). If Fed’s “accompanying statement” is neutral (not overly dovish or hawkish), US market's initial reaction may be muted, as the news is already incorporated into stock prices. However, interest rate cuts are generally positive for equities. This is because (i) they lower borrowing costs for businesses and (ii) increase present value of future corporate earnings. Meaning in the medium to long term, selective stocks should rise favourably. I guessed the question on everyone’s mind is with interest cut imminent, will it bring about a Santa rally in 2 week’s time ? The possibilities seem endless now. . Gains increased to 181% from 169% I guessed the question on everyone’s mind is with interest cut imminent, will it bring about a Santa rally in 2 week’s time ? The possibilities seem endless now. Remember to check out my other posts. (See below). Help to Repost ok, Thanks. Due to creative differences and bias, I will scale back my posting. My 2,430 ‘timeless’ posts remain available (for now) for those who value fundamentals as Mr Buffett had pointed — invest in businesses, not pick stocks. To new subscribers, no flashy screens to entice blind investing. I aim to share on how to fish, not fish for you. I’m grateful to share what I know. In the alternate moo moo universe, where I am valued & appreciated, I will still be sharing. Good luck on your i-journey. Must Read: Click on below titles to access. Repost to share, Like as encouragement ok. Thanks. NU : Bank Stock To Have and To Hold ! Goldman Says US Market Sell-Off Far From Over ? NIO Trims Losses in Q3, Beat Expected. Buy ? Do you think now is the time for GOOG to shine, amongst the Magnificent 7 ’? Do you think GOOG will continue to rise into 2026 ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. 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