Reopening in the United States: the economy regains momentum after 43 days of lockdown.
November 18, 2025
By Mario Catalá
United States
After 43 days of shutdown, Republicans and Democrats reached an agreement last week, ending the longest administrative shutdown in US history. The prolonged shutdown of the US administration has limited visibility on several key sectors of the economy, especially employment. However, the available data reinforce a positive outlook and highlight the divergence between ‘hard data’ indicators (official data, with objective and quantitative measurements such as GDP or the unemployment rate) and ‘soft data’ indicators (data based on surveys and perceptions, which are more subjective, such as consumer confidence and PMIs).
PMIs remain favourable, with the Manufacturing PMI for October standing at 52.5, up from 52.2 previously, while the Services PMI, although falling short of estimates, rose to 54.8 from 54.2 in September. As for GDP, no official figures are available due to the administrative shutdown, but the Atlanta Fed projects 4% growth for the last quarter of the year, which would put GDP at around 2.6% in 2025. Retail sales also remain without official data.
Consumer confidence continues to show weakness in future surveys. The Conference Board recorded a slight improvement in October to 94.6 from 93.4 previously, while the University of Michigan lowered its reading to 50.3, close to historic lows. In the labour market, the lack of official data leaves the ADP survey as a reference, which added 42,000 jobs in October compared to the 32,000 expected, although some major outplacement companies warn that the number of layoffs is likely to increase significantly in October. in a context of growing adoption of artificial intelligence, falling consumer spending and Trump’s tariff policies leading to increased procurement costs.
In terms of prices, the CPI for September stood at 3%, one tenth above the previous month and better than expected. Core inflation remained at the same level, 3%. For November, the Cleveland Fed estimates a CPI of 2.97% and a core CPI of 2.95%, with projections for the quarter at 3.32% and 3.09% respectively. There is still no official data for the PCE, although estimates point to 2.86% and 2.91% in underlying terms. Since January 2020, inflation has already accumulated an annual growth of 4%.
In monetary policy, the Fed reduced its benchmark interest rate by 25 basis points in October, placing the range at 3.75%-4%. After the meeting, the market discounted a high probability of a further cut at the last meeting of the year, but recent statements by the Fed’s more hawkish members, expressing clear concern about a possible rebound in inflation in the country, have made the consensus less certain about an additional cut in December.
Europe
The European macroeconomic outlook remains positive, although with notable differences between countries, as reflected in the PMIs and employment data. The manufacturing PMI for October reached the equilibrium level of 50, with countries such as Sweden, Greece and Spain well above 50, compared to Germany, Italy and especially France, which were in the low range. The services PMI exceeded forecasts, rising to 53 from 51.3 previously, driven by Ireland, Spain and Sweden.
Third-quarter GDP stood at 1.3%, one tenth above expectations, although below the 1.5% recorded in the first two quarters of the year. Retail sales maintained their positive trend, with annualised growth of 1% in September and an upward revision of the previous figure to 1.6%, completing a consecutive year of growth. Investor confidence as measured by the ZEW Institute improved in November to 25, up from 22.7 previously and above expectations.
The unemployment rate remains stable at 6.3%, although with sharp contrasts: Spain stands at 10.4%, Finland at 9.3% and Sweden at 8.7%, while Germany, the Netherlands and Poland are between 3.5% and 3.7%. Domestic consumption continues to struggle, although this is not due to a lack of spending power. Savings rates have reached levels not seen since the pandemic, which could translate into higher growth if socio-economic conditions improve.
In terms of prices, the provisional CPI for October fell by one tenth to 2.1%, while core inflation remained at 2.4%, confirming that inflation has stabilised significantly in Europe. It was therefore no surprise that the ECB kept its benchmark rates unchanged for the third consecutive meeting, with the deposit facility at 2%. The market anticipates stability and a possible further reduction of 25 basis points in mid-2026 if macroeconomic data allow.
China
In China, October data reflected the impact of the Golden Week holiday, although the overall economic trend shows no significant changes. Third-quarter GDP stood at 4.8%, one tenth above forecasts, which will likely allow the year to close above the government’s 5% target. PMIs remain at the 50 mark, with manufacturing correcting to 49 (below the expected 49.6), while services stood at 50.1, in line with estimates.
Foreign trade suffered a setback after strong growth in September, with exports falling 1.1% and imports growing 1.1%, both below expectations. Industrial production showed a significant rebound in September, rising to 6.5% from 5.2% previously. The unemployment rate improved by one tenth of a percentage point in September, standing at 5.2%, a level that appears to be consolidating. In terms of prices, the CPI rebounded to 0.2% in October, the highest reading of the year and the first positive reading since June, while the PPI improved to -2.1% from -2.3%. The increase in the CPI is mainly attributed to higher consumption during the holiday week, although it remains to be seen whether this trend will be temporary or will consolidate.