Weekly Economic Update

September 19, 2025 
 

Government Shutdown

 

Rather than the usual scheduled first week of the month packed with major economic data, the government shutdown left investors mostly in the dark, as several key reports were not released. The latest economic data collected by private companies caused little reaction. As a result, mortgage rates ended the week down slightly, near their lowest levels of the year.

 

In the past, government shutdowns have had little lasting impact on mortgage markets. That said, the longer the shutdown, the greater its effects will be. In the short run, the most noticeable aspect is the delay in the release of economic reports from government agencies, including key labor market and inflation indicators. In addition, the collection of government data has stopped, meaning that economists may have some doubts about the accuracy of the reports for October whenever they do come out. Also worth noting, private companies are the source of a reasonable amount of labor market data, but they can provide little information about inflation. Longer-term, investors primarily will be watching to see if there is a permanent reduction in government jobs, which could lead to less consumer spending and slower economic growth. 

 

 

Two significant economic reports released this week by the Institute of Supply Management revealed mixed results. The ISM national services sector index unexpectedly fell to 50.0, the lowest level since May, and the national manufacturing index increased to 49.1. Readings above 50 indicate an expansion in the sectors and below 50 a contraction. Service companies continue to outperform, but higher tariffs on foreign goods may provide a boost to manufacturing companies over time.

 

 

The latest report on consumer confidence published by the Conference Board revealed that consumers remain concerned about the impact of higher tariffs and the government shutdown. The index dropped sharply in June to 94.2, well below the consensus forecast of 96.0, and the lowest level since April. The decline was seen across nearly all age and income groups. In particular, the outlook for the labor market weakened. The share of consumers viewing jobs as plentiful fell for the ninth straight month to the lowest level since February 2021. 

 

Looking ahead, investors will continue to watch for additional information about tariffs and monitor comments from Fed officials for hints about monetary policy later in the year. For economic reports, it was already going to be a very light week. With the government shutdown, there may not be any significant economic data released next week. The Trade Deficit is scheduled to come out on Tuesday. 

 

 

Weekly Change

10yr Treasury

fell

0.05

Dow

rose

500

NASDAQ

rose

300

 

Calendar

Tue

10/7

Trade Deficit

Wed

10/8

Fed Minutes

Fri

10/10

Sentiment

 
(by DBA MBSQuoteline)