Pantheon Publications

12 December 2025 US Monitor Weak October retail sales likely to set the tone for Q4

• We think retail sales dropped by a hefty 0.7% in October, dragged down by a big fall in auto sales. 
• A raft of indicators suggest that consumers’ spending will grow at a negligible pace in Q4. 
• The Thanksgiving week drop in continuing claims is a seasonal fluke; the trend remains upwards.

11 December 2025 US Monitor Expect a brief skip in the Fed's easing cycle, not a long hiatus

The dots imply three regional Fed presidents who will
vote in 2026 disagreed with this meeting’s easing...

...But we reckon all the permanent voters expect to
ease in 2026; labor data will trigger March action.

Year-over-year growth in the ECI was stable at 3.6%
in Q3, but leading indicators signal a sharp fall soon. 

10 December 2025 US Monitor FOMC likely will signal a Q1 pause, but only tentatively

• Investors already expect a two-meeting hiatus in the easing cycle; the FOMC will not signal a longer wait.
• Recent data surprises have reinforced the case for easing; much more data will be available in January.
• We expect 75bp of easing in 2026, but fiscal policy and FOMC personnel changes cloud the outlook.

9 December 2025 US Monitor Weaker labor demand is more than offsetting the immigration hit

• Immigration has slowed sharply this year, but the labor force likely still is growing, slowly.
• The recent upward creep in unemployment implies labor demand has slowed by more than supply.  
• Higher unemployment will squeeze wage growth and keep the pressure on the FOMC to continue easing.

5 December 2025 US Monitor FOMC to lower inflation forecasts after September's PCE data

• We look for a 0.22% rise in the September core PCE deflator, which would keep the inflation rate at 2.9%...
• ...This will enable FOMC participants to lower their Q4 forecast, clearing the path for easing policy again.
• Initial claims plunged because seasonal adjustment has gone amiss; labor market slack is still rising.

4 December 2025 US Monitor Private payrolls probably holding up better than ADP's data suggest

• ADP’s numbers have considerably understated the initial official estimates of private payrolls this year. 
• Reliable surveys suggest an initial private print of 75K-to-100K in November, still too soft for comfort. 
• A raft of indicators point to consumer weakness in Q4. We think spending will rise by only around ½%.

3 December 2025 US Monitor Is the equilibrium unemployment rate increasing?

• Lower immigration, AI, tariffs and federal job cuts have potential to lift the natural unemployment rate...
• ...But firms are filling openings more easily and plan to slow wage growth, pointing to excess unemployment.
• No signs of excessive unemployment by state or by sector, indicative of a still-low equilibrium rate.

2 December 2025 US Monitor Is a 25bp easing in the funds rate next week now locked in?

• Investors see a near-90% chance of the FOMC easing  next week, back to levels before October’s meeting.
• Sometimes, the Chair moves markets during the  blackout via the WSJ, but that seems unlikely now.
• Manufacturing payrolls have fallen materially in 2025,  but likely aren’t a canary in the coalmine this time.

26 November 2025 US Monitor PPI data leave core PCE inflation set to undershoot the FOMC's forecast

• PPI and CPI data imply the core PCE deflator rose by just 0.22% in September.
• Goods price rises are slowing and retailers, especially auto retailers, are still partially absorbing the tariffs.
• The Conference Board’s consumer survey implies the labor market need more support from the FOMC.

25 November 2025 US Monitor Retail sales likely grew modestly in September, before a lackluster Q4

• We look for a subpar 0.3% increase in September retail sales, consistent with real spending edging down.
• Food service sales likely fell sharply, while the more reliable indicators of control sales were soft.
• Bloomberg Second Measure data, Google search volumes and hotel room occupancy signal a weak Q4.

21 November 2025 US Monitor Rising unemployment keeps a December FOMC easing in play

• The pick-up in payrolls was a by-product of the most generous September seasonal on record...
• ...The chances of a downward revision are very high; October’s report will be substantially weaker too.
• The rise in the unemployment rate is being fuelled by new entrants and layoffs; expect more to come in Q4.

20 November 2025 US Monitor New data calendar reduces December FOMC easing chances

• The BLS’ new data calendar means today’s employment report is make-or-break for a December easing.
• The GDPNow model is running a bit too hot; GDP growth in Q3 of about 31/2% seems more likely.
• October’s jump in WARN filings is due to new laws in Washington state; the trend is rising moderately.

19 November 2025 US Monitor September labor market data to reinforce the case for FOMC easing

• We expect a 50K increase in September payrolls and a 75K rise in private jobs, lifted by residual seasonality.
• The unemployment rate usually drops in September, but surveys point to a deteriorating trend.
• Growth in average hourly earnings likely was limited by a calendar quirk, but the trend is slowing too. 

18 November 2025 US Monitor How much is AI contributing to the labor market slowdown?

• AI has had a net positive impact on the labor market this year; job losses in tech have been small...
• ...While surging stock prices for AI firms have boosted households’ spending and, therefore, employment.
• Layoffs, however, likely will step up next year as AI adoption becomes more widespread.

14 November 2025 US Monitor December easing still likely, despite regional Fed Presidents' qualms

• Markets now see an even chance of a December rate cut, after a volley of hawkish Fed speeches...
• ...But no one has changed their view from September, and the official data will support the doves.
• Tinkering with tariffs on food would have only a very small impact on overall inflation.

13 November 2025 US Monitor The next CPI report is unlikely to dissuade the FOMC from easing

• The October CPI probably will never be released, but indicators point to a mere 0.2% rise in the core.
• Pass-through from tariffs to goods prices appears to have slowed; vehicle prices still largely unaffected. 
• Residual seasonality, lower health insurers’ margins and fading rent rises imply slower services inflation.

12 November 2025 US Monitor Calm claims data mask a rising trend in unemployment

• Continuing claims are rising only gradually, but understate the recent increase in labor market slack.
• Federal staff who took deferred resignation offers are ineligible to claim; new graduates can’t claim either.
• Capex intentions have improved lately, but remain consistent with weak underlying investment. 

7 November 2025 US Monitor How worrying is the surge in layoff announcements?

• The relationship between Challenger job cut announcements and actual layoffs has loosened lately...
• ...WARN filings are a better leading indicator; they also rose in October, but to a smaller extent.
• We agree with the consensus that break-even payroll growth is about 50K, but for first estimates its 100K.

6 November 2025 US Monitor Exports are struggling, despite the weaker dollar

• Goods exports are struggling, as foreign firms run down the inventory they amassed earlier this year.
• Services exports are flailing too, despite strong demand for software; US politics has put off tourists.
• Data centre construction is surging, but it is too small to provide much a of boost to the sector at large.

5 November 2025 US Monitor ADP's data are a lousy guide to both initial and final payrolls

• The first ADP payroll estimate is among the worst indicators of both initial and benchmarked payroll data.
• The final data line up better, but only because ADP re-weights its data after benchmarking by the BLS. 
• The Treasury’s method for inferring the CPI without BLS data implies a 0.36% monthly rise in October.