Macro Update: October 2025

The government has shut down, but news is slow otherwise

A note to readers: sadly, this is going to be the last Roth Research post. While I enjoy being here on Substack, ultimately my goal was to make this newsletter a profitable pursuit, which I think is especially reasonable considering the publication provides potentially high-leverage financial advice. However, both my existing subscribers and new folks I’ve reached since going paid have been uninterested in the modest $7.99 subscription fee, so I’m going to abandon the newsletter. That being said, my existing posts will stay up (because why not?) and my paid posts will be made free.

It’s been smooth sailing for US equity investors for the last few months.

As we enter October, a month that has historically been somewhat wild for US equity markets, there is no sign of any such trouble brewing. The S&P 500 is at all time highs and has not moved more than 1% in either direction since August 22. (Experienced traders generally consider these slowly gaining kinds of markets the most healthy, as drops are obviously bad but large gains are considered a sign of froth that might be swiftly reversed.) Bond yields were pretty much flat in September, while gold saw big gains as investors anticipated more dollar devaluation from the Fed.

The biggest item in the news has been the US government shutdown. I wrote in detail here about why the shutdown is not particularly relevant for investors. In case I forget to remove the paywall around this post, here’s the TL;DR: they basically don’t affect the stock market. Even the 2018-2019 shutdown, the longest and most expensive in US history, which generated its fair share of scary headlines, saw the stock market actually significantly rise during its run.

So that shouldn’t concern investors. Is there anything else that should? Slow or nonexistent jobs growth was a concern last month—since the government closure affected the Bureau of Labor Statistics, the jobs report that was supposed to be released last Friday ended up getting pushed off. There are indications of it being bad, as private sector firms that collect jobs-related data are showing relatively small negative numbers for job creation. However, it’s important to realize that the federal government is shedding jobs at a very active pace, which influences the numbers. Additionally, as I’ve talked about before, there have been many instances of slow or even negative job growth phases that were not associated with a recession or even a slowdown in the economy.

Another strike against the “recession is coming” theory (which, as my work has pointed out, has been bandied around since at least six months ago) is the release of GDP numbers. For a mature economy, 2.5-3% is considered strong, but the most recent release saw 3.8% annualized growth, far stronger than anybody had expected. This growth, detailed here by respected finance blogger Wolf Richter, was partly due to strong consumer spending (despite all predictions consumers would slow down despite being broke by many measures) but even more so due to private investment. A push to build factories in the US to avoid tariffs as well as AI investment has caused American manufacturing, long dormant, to roar back in a big way.

What about the Federal Reserve? Well, exactly as telegraphed, the Fed cut rates by a quarter percentage point last month. But the meeting was by no means a victory for the lower rates crowd: at least a third of participants don’t think there should be any more rate cuts this year, and the language provided by the central bank didn’t guarantee anything. Though markets were slightly disappointed, this could be good news in the long term, as a resurgence in inflation would be chaotic for the economy.

In summary, there doesn’t appear to be anything concerning on the horizon for investors right now. Something will come up eventually, as it always does, but in the meantime, here at Roth Research we recommend turning the screen off, opening a beer, and watching the sun set or something. Might as well enjoy the smooth sailing, because it never continues forever!

All for now,
Ira