As the dust settles from the longest government shutdown in recent memory, a wave of delayed economic data has painted a complicated—at times contradictory—picture of the U.S. economy heading into the pivotal 2025 holiday shopping season. Released on Tuesday, November 25, after a month-and-a-half blackout, the latest numbers from the Bureau of Labor Statistics and other agencies reveal a nation wrestling with persistent inflation, wavering consumer confidence, and a housing market in flux.
Retail sales, a key barometer of consumer health, rose a modest 0.2% in September 2025 according to the Commerce Department—a marked slowdown from several months of more robust spending. When inflation is factored in, however, the story shifts: with prices up 0.3% that month, real spending actually dipped by 0.1%. As Bloomberg reported, this tepid growth follows a period of consumer fatigue that set in just before the government shutdown and has yet to abate, raising caution as Americans approach the year’s busiest shopping stretch.
The data backlog, caused by the shutdown, has left economists and policymakers scrambling to interpret the state of the economy. According to CNN, the September reports for retail sales and wholesale inflation arrived several weeks late, while crucial October figures—such as the jobs report and Consumer Price Index—will only be released in partial form alongside November’s numbers. This unprecedented delay has complicated the Federal Reserve’s assessment of whether to lower interest rates again at its upcoming December meeting.
Wholesale inflation for September ticked up by 0.3%, holding the annual rate steady at 2.7%. Wholesale goods prices leapt 0.9%—the sharpest monthly surge in over 18 months—driven largely by a spike in energy prices, especially gasoline. Yet, when volatile food and energy categories are stripped out, the core Producer Price Index (PPI) rose just 0.1% for the month, bringing the annual rate to 2.6%, its lowest since July 2024. As CNN noted, this figure was even better than economists’ expectations and suggests that some underlying inflationary pressures may be easing, at least for now.
Still, the impact of tariffs and rising import costs is being felt unevenly across industries. Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, wrote that "auto retailers [are] accepting substantially lower margins, while most other retailers are passing on all the rise in acquisition prices to consumers." For shoppers, this means better deals on sneakers and sporting goods, but higher prices on electronics and furniture—categories where the U.S. remains heavily reliant on imports.
Consumer confidence, meanwhile, has taken a noticeable hit. The Conference Board’s survey for November showed sentiment dropping to its lowest level since April. Dana Peterson, the organization’s chief economist, explained in a release: "Consumers’ write-in responses pertaining to factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade, and politics, with increased mentions of the federal government shutdown." The survey also revealed growing pessimism about job prospects and household incomes in the months ahead, with expectations for labor market conditions and income growth both deteriorating sharply.
Despite these anxieties, the labor market remains relatively resilient. Unemployment ticked up slightly but stayed at a low 4.4% in September, according to the Labor Department. However, the pace of job gains has slowed, with high-profile layoffs making headlines and the average monthly jobs increase falling to around 62,000. This divergence—an expanding economy buoyed by robust consumer spending and AI investments, yet a softening labor market—has left Federal Reserve policymakers divided on the best path forward.
The Fed has already lowered interest rates twice in 2025, once in September and again in October, each time by a quarter point. This brings the central bank’s key rate to its lowest level in three years. Yet, as CNN reported, officials remain split on whether to cut again in December. Some, like New York Fed President John Williams and San Francisco Fed President Mary Daly, have signaled support for further easing, which has helped lift markets in recent days. Others argue that rates should hold steady to keep inflation in check, given that it has hovered above the Fed’s 2% target for more than four years.
Wall Street has responded with cautious optimism. On Tuesday, the Dow climbed roughly 550 points (1.19%) in early afternoon trading, while the S&P 500 rose 0.72% and the Nasdaq edged up 0.41%. Investors are betting—by more than an 80% probability, according to CME FedWatch—that the Fed will lower rates in December. Lower rates tend to encourage spending and business investment, boosting corporate profits and making stocks more attractive relative to bonds. However, the tech sector stumbled, with Nvidia falling around 3% after news that Meta might purchase chips from Alphabet.
On the housing front, there are signs of both resilience and strain. Pending home sales jumped 1.9% in October, reaching their highest level since November 2024, as mortgage rates dipped to their lowest point of the year in late October before rising slightly. The National Association of Realtors highlighted that the Midwest led the way with a 5.3% monthly increase, while contract signings retreated in the pricier West. "The Midwest shined above other regions due to better affordability, while contract signings retreated in the more expensive West region," Lawrence Yun, the group’s chief economist, said in a release.
Yet, home price appreciation is losing steam. The S&P CoreLogic Case-Shiller U.S. National Home Price Index rose just 1.3% in September, down from August’s 1.4% gain and marking the slowest pace since mid-2023. Nicholas Godec of S&P Dow Jones Indices noted, "National home prices continued trailing inflation, with September’s (Consumer Price Index) running 1.7 percentage points ahead of housing appreciation." Cities like Chicago, New York, and Boston saw the strongest price gains, while former pandemic hotspots such as Tampa, Phoenix, Dallas, and Miami experienced outright declines. Godec observed, "Markets that were pandemic darlings—particularly in Florida, Arizona, and Texas—are now experiencing outright price declines."
With Black Friday and the holiday shopping season underway, Americans are still opening their wallets. Early reports from Bank of America suggest that high-income households continue to spend robustly, while middle- and lower-income groups, despite expressing frustration with their finances, are also contributing to aggregate spending. But, as CNN pointed out, much of this uptick is due to higher prices, not necessarily increased consumption. A recent Fox News poll found that 76% of Americans hold a negative view of the economy, up from 67% in July—a clear sign that inflation and affordability remain top concerns.
As policymakers, investors, and consumers alike await the next round of economic data—still delayed and incomplete—uncertainty reigns. The coming weeks will test whether the U.S. economy can maintain its momentum or whether the headwinds of inflation, muted wage growth, and lingering pessimism will slow the nation’s recovery.
