(NEW YORK) — Consumer sentiment soured in October as a government shutdown threatens to weaken a wobbly economy beset by an uptick in inflation and a sharp slowdown of hiring, fresh data on Friday showed. The reading marked a decrease from the previous month but it came in higher than economists expected.
Shopper attitudes have worsened for three consecutive months, resuming a decline that took hold after President Donald Trump took office, University of Michigan Survey data showed.
At its low point this year, consumer sentiment fell close to its worst level since an acute bout of inflation three years ago. The measure remains well below where it stood in December, before Trump took office.
Year-ahead inflation expectations ticked down from 4.7% in September to 4.6% in October, the data showed. The outcome anticipated by respondents would put inflation well above its current level of 2.9%. Long-run inflation expectations held steady from the previous month, data showed.
The data on consumer sentiment is likely to garner more attention than usual, since the government shutdown has halted closely watched releases from the federal government, including monthly jobs and inflation reports.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, is a key bellwether for the outlook of the nation’s economy.
A government shutdown typically risks only modest damage for the economy but it can cause a marked decline in consumer sentiment, threatening a later drop in consumer spending, some experts previously told ABC News.
Consumer sentiment fell more than 7 points from December 2018 to January 2019, coinciding with the most recent 35-day government shutdown, according to a Committee for Responsible Federal Budget analysis of University of Michigan survey data. A souring of consumer sentiment, albeit limited, occurred over each of the three most recent shutdowns that preceded 2018.
The government shutdown, which entered its 10th day on Friday, has shown little sign of resolution. The Senate has rejected dueling funding proposals from Democrats and Republicans in seven separate votes.
The shutdown has coincided with a delicate moment for the nation’s economy, as a hiring slowdown stokes recession fears and inflation proves difficult to fully contain.
Federal Reserve Chair Jerome Powell said last month that policymakers face a “challenging situation” while they attempt to navigate the economy through a “turbulent period.”
(WASHINGTON) — The government shutdown halted the release of key economic data, choking off the flow of information as some experts warn the economy may be slipping toward a recession, some economists told ABC News.
A federal agency postponed the release of a monthly jobs report on Friday, leaving observers in the dark about the status of a sharp hiring slowdown. If the government shutdown stretches into next week, fresh inflation figures will go unreported, masking price levels in the midst of rising costs.
Jim Reid, a research strategist at Deutsche Bank, in a memo to clients on Monday, lamented the “data vacuum.”
The absence of government data heightens uncertainty at a fraught moment for the U.S. economy, potentially hamstringing responses from consumers, businesses and policymakers, some economists told ABC News. The extent of possible shutdown-induced economic damage could also go undetected, they added.
“It adds to risk and uncertainty at a most inopportune time,” Mark Hamrick, senior economic analyst at Bankrate, told ABC News. “Now we’re all essentially looking through a fog.”
The government shutdown entered its sixth day on Monday. The Senate has rejected dueling funding proposals from Democrats and Republicans in four separate votes, most recently on Friday.
The U.S. Department of Labor last week said some data would not be released during the shutdown, including closely watched monthly jobs and inflation reports. The Bureau of Economic Analysis and the Census Bureau — two important sources of additional data — also said they will pause scheduled releases for the duration of a shutdown.
The loss of data has arrived at an uneasy period for the economy. In recent months, the economy has suffered a sharp hiring slowdown alongside a rise in inflation, setting the conditions for what economists call “stagflation.”
The downshift in hiring has proven especially worrisome, stoking concern among some economists about a possible recession.
A jobs report last month showed a sharp decrease in hiring in August, extending a lackluster period for the labor market. Meanwhile, a revision of previous hiring estimates days later revealed the U.S. economy added far fewer jobs in 2024 and early 2025 than previously estimated, deepening concern.
“The job market is the primary area of concern for the U.S. economy,” Hamrick said, adding that the hiring cooldown suggests a 40% risk of a recession over the next 12 months. “That’s an elevated recession risk.”
Without up-to-date government data, businesses may be hesitant to take actions such as major expansions or hiring sprees, while consumers could seek to avoid big-ticket purchases, some experts said.
“In general, the absence of economic data makes the economic trajectory more uncertain as it forces investors and business executives to be more cautious,” Gregory Daco, chief economist at accounting firm EY, told ABC News.
The Federal Reserve is set to announce its next interest rate decision on Oct. 29, following a meeting between members of the FOMC. If the government shutdown remains in place ahead of that meeting, it could leave Fed officials ill-equipped to set the best policy, Hamrick said.
“This is an exceptionally difficult period to read where inflation is going and where growth is going,” Kenneth Rogoff, a professor of economics at Harvard University, told ABC News.
To be sure, an interruption of data releases could leave investors unaware of possible improvement in the economy. Some experts noted the continued availability of private sector data sources, though observers typically view such data as inferior to government statistics.
A government shutdown typically risks only modest damage to the U.S. economy, stemming mainly from furloughed public workers, who temporarily lose out on pay and put a dent in U.S. consumer spending.
Each week of a potential government shutdown would reduce annualized real gross domestic product growth in the quarter by about 0.1%, Mark Zandi, chief economist at Moody’s Analytics, told ABC News in a statement.
For reference, the economy grew by an average annualized rate of 1.6% over the first half of 2025, meaning it would take several weeks of a government shutdown for notable damage to be incurred.
An absence of economic data could make it more difficult for observers to identify the economic impact of the shutdown, some experts said.
“Typically, shutdowns are not major events, but nothing is typical about the current environment,” Rogoff said.
(NEW YORK) — Stocks closed higher on Wednesday, just hours after a government shutdown began, defying fears among some observers about the economic risk posed by a potentially prolonged impasse.
The Dow Jones Industrial Average jumped 43 points, or 0.09%, while the S&P 500 climbed 0.34%. The tech-heavy Nasdaq increased 0.42%.
The Dow and S&P 500 each closed at record highs on Wednesday.
The uptick extended a period of resilient performance for markets, which shrugged off the looming impasse a day earlier. Each of the major indexes ticked up on Tuesday.
The shutdown coincides with a rough patch for the U.S. economy, at least by some key metrics. A recent hiring slowdown has stoked recession fears, while inflation has proven difficult to fully contain.
Fresh hiring data on Wednesday morning deepened concern about the labor market. Private sector employment declined by 32,000 jobs in September, registering well short of economists’ expectations of 45,000 jobs added, according to data firm ADP research.
A government shutdown typically risks only modest damage for the U.S. economy, stemming mainly from furloughed public workers, who temporarily lose out on pay and put a dent in U.S. consumer spending, analysts previously told ABC News.
The impact of a shutdown could be more significant this time around, however, since the wobbly economy may strain under the weight of a potentially prolonged interruption, while a halt in the release of key economic data could make it more difficult for policymakers to steer the economy, they added.
(NEW YORK) — Stocks ticked higher in midday trading on Wednesday, just hours after a government shutdown began, defying fears among some observers about the economic risk posed by a potentially prolonged impasse.
The Dow Jones Industrial Average jumped 71 points, or 0.15%, while the S&P 500 jumped 0.1%. The tech-heavy Nasdaq increased 0.1%.
The uptick extended a period of resilient performance for markets, which shrugged off the looming impasse a day earlier. Each of the major indexes ticked up on Tuesday, including a record high for the Dow.
The shutdown coincides with a rough patch for the U.S. economy, at least by some key metrics. A recent hiring slowdown has stoked recession fears, while inflation has proven difficult to fully contain.
Fresh hiring data on Wednesday morning deepened concern about the labor market. Private sector employment declined by 32,000 jobs in September, registering well short of economists’ expectations of 45,000 jobs added, according to data firm ADP research.
A government shutdown typically risks only modest damage for the U.S. economy, stemming mainly from furloughed public workers, who temporarily lose out on pay and put a dent in U.S. consumer spending, analysts previously told ABC News.
The impact of a shutdown could be more significant this time around, however, since the wobbly economy may strain under the weight of a potentially prolonged interruption, while a halt in the release of key economic data could make it more difficult for policymakers to steer the economy, they added.
This is a developing story. Please check back for updates.
(NEW YORK) — Stocks dropped in early trading on Wednesday, just hours after a government shutdown began, shuttering some government services and complicating a delicate moment for the nation’s economy.
The Dow Jones Industrial Average fell 87 points, or 0.1%, while the S&P 500 slid 0.4%. The tech-heavy Nasdaq declined 0.6%.
The selloff marked the first sign of shutdown-related strain for markets, which shrugged off the looming impasse a day earlier. Each of the major indexes ticked up on Tuesday, including a record high for the Dow.
The shutdown coincides with a rough patch for the U.S. economy, at least by some key metrics. A recent hiring slowdown has stoked recession fears, while inflation has proven difficult to fully contain.
Fresh hiring data on Wednesday morning deepened concern about the labor market. Private sector employment declined by 32,000 jobs in September, registering well short of economists’ expectations of 45,000 jobs added, according to data firm ADP research.
A government shutdown typically risks only modest damage for the U.S. economy, stemming mainly from furloughed public workers, who temporarily lose out on pay and put a dent in U.S. consumer spending, analysts previously told ABC News.
The impact of a shutdown could be more significant this time around, however, since the wobbly economy may strain under the weight of a potentially prolonged interruption, while a halt in the release of key economic data could make it more difficult for policymakers to steer the economy, they added.
U.S. President Donald Trump speaks during a bilateral meeting with President of Ukraine Volodymyr Zelensky at the 80th session of the UN’s General Assembly (UNGA) at the United Nations headquarters on September 23, 2025 in New York City. World leaders convened for the 80th Session of UNGA, with this year’s theme for the annual global meeting being “Better together: 80 years and more for peace, development and human rights.” (Photo by Chip Somodevilla/Getty Images)
(WASHINGTON) — President Donald Trump on Thursday announced an agreement that will pave the way for social media giant TikTok to come under the control of a group of U.S. investors.
The move comes months after a ban on the China-based app was set to take effect at the outset of this year. Instead, Trump delayed the ban multiple times and appears poised to secure the popular platform for domestic ownership.
Scrutiny has centered on the fate of TikTok’s algorithm, a proprietary formula that fuels the attention-grabbing social media platform. Vice President J.D. Vance, who stood alongside Trump during the Oval Office announcement, said the agreement would bring the algorithm “under the control of American investors,” adding that further details would be unveiled over the coming days.
“This deal really does mean Americans can use TikTok but actually use it with more confidence than they had in the past because their data is secure and it won’t be used as a propaganda weapon like it has in the past,” Vance said.
The U.S.-based version of TikTok will be valued at $14 billion, Vance said.
The agreement received approval from Chinese President Xi Jinping, Trump said. As of Thursday afternoon, China had not publicly confirmed the terms issued by the Trump administration.
Trump said tech giant Oracle would be among the U.S. investors in TikTok, but he did not disclose the full roster of new owners.
Congress passed the ban last spring with overwhelming bipartisan support, granting TikTok a 270-day window to cut its ties with China-based parent company ByteDance or face a ban.
Instead of initiating a sale, TikTok pursued a legal challenge on First Amendment grounds that failed in the Supreme Court.
The unanimous ruling from the nation’s highest court found merit in national security concerns regarding potential user data collection or content manipulation that the Chinese government might undertake.
The app became temporarily unavailable in January, before the Trump administration assured app store owners Google and Apple that law enforcement would not pursue potential violations of the law.
This is a developing story. Please check back for updates.
(NEW YORK) — The U.S. economy expanded significantly more than initially estimated over a recent three-month period, suggesting robust growth despite uncertainty set off by President Donald Trump’s tariff policy, federal government data on Thursday showed.
The U.S. economy grew at an annualized rate of 3.8% in the second quarter in the government’s final estimate, besting a 3.3% rate issued in its second estimate and far exceeding a 3% initial estimate.
The figure marked a sharp acceleration from an annualized contraction of -0.5% over the first three months of 2025. Still, taken together, the data indicates an economic slowdown over the first half of 2025.
A boost in consumer spending helped propel the economic surge over three months ending in June, the U.S. Commerce Department said. Consumer spending, which accounts for about two-thirds of U.S. economic activity, is a key bellwether for the outlook of the nation’s economy.
To some degree, however, Trump’s levies have blurred the GDP findings.
The government’s GDP formula subtracts imports in an effort to exclude foreign production from the calculation of total goods and services. Changes in the reading on this account reveal neither underlying economic weakness nor strength.
The measure of the GDP fell over the first three months of the year, largely due to a surge of imports as firms stockpiled inventory to avoid far-reaching tariffs. Conversely, a drop-off in imports over the second quarter may have inflated the second-quarter GDP figure.
The GDP growth “primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP,” the U.S. Commerce Department said on Thursday.
The fresh data arrives at a wobbly moment for the nation’s economy.
A jobs report earlier this month showed a sharp decrease in hiring in August, extending a lackluster period for the labor market. Meanwhile, a revision of previous hiring estimates days later revealed the U.S. economy added far fewer jobs in 2024 and early 2025 than previously estimated, deepening concern about the health of the U.S. job market.
The weak jobs data has raised alarm among some analysts who told ABC News the U.S. economy may be slipping toward a recession, though the economy has largely averted the type of widespread job losses that often accompany a downturn.
The Federal Reserve cut interest rates last week in an effort to boost hiring. The Federal Open Market Committee (FOMC), a policymaking body at the Fed, projected two additional quarter-point rate cuts over the remainder of 2025.
Five meetings and nine months had elapsed since the Fed last cut interest rates.
A close-up of a Starbucks coffee shop sign on September 8, 2025 in Cardiff, Wales. (Photo by Matthew Horwood/Getty Images)
(NEW YORK) — Coffee giant Starbucks will lay off workers and close stores as part of a $1 billion restructuring plan, CEO Brian Niccol said in a memo to employees on Thursday.
The company will slash 900 employees at its stores in North America, Niccol said. The store closures will amount to a roughly 1% decline in the total number of Starbucks locations in North America in this fiscal year, after accounting for some store openings, Niccol added.
“While we’re making good progress, there is much more to do to build a better, stronger, and more resilient Starbucks,” Niccol said.
Shares of Starbucks ticked slightly higher in pre-market trading after the announcement early Thursday morning.
Starbucks weathered sluggish sales in recent years as customers weathered a years-long bout of elevated inflation, analysts previously told ABC News.
This is a developing story. Please check back for updates.
Construction continues on the Marriner S. Eccles Federal Reserve Board Building, the main offices of the Board of Governors of the Federal Reserve System on September 16, 2025 in Washington, DC. (Kevin Dietsch/Getty Images)
(WASHINGTON) — Federal Reserve Chair Jerome Powell warned a recent uptick of inflation, alongside a hiring slowdown, poses a “challenging situation” for central bankers as they aim to steer the U.S. economy through a “turbulent period.”
The Fed, which opted to cut interest rates last week, is guided by a dual mandate to keep inflation under control and maximize employment. Speaking at the Greater Providence Chamber of Commerce, in Providence, Rhode Island, on Tuesday, Powell said a sharp cooldown of hiring over the summer had shifted the balance of risks toward greater concern over the labor market.
“The downside risks to employment have risen,” Powell said.
The remarks came days after the Fed cut interest rates for the first time this year in an effort to boost hiring. The Federal Open Market Committee (FOMC), a policymaking body at the Fed, projected two additional quarter-point rate cuts over the remainder of 2025.
Still, Powell voiced concern about the trajectory for prices, saying “uncertainty around the path of inflation remains high.”
“Two-sided risk mean there is no-risk free path,” Powell added.
The central bank last week delivered a policy long-sought by President Donald Trump, though the size of the rate cut fell short of a larger reduction preferred by Trump.
The announcement marked a flashpoint in the monthslong pressure campaign directed at the Fed by Trump.
In recent weeks, Trump has moved to fire one member of the Fed’s board of governors and secure Senate confirmation for another. Both officials were among the 12 policymakers who cast votes on the interest-rate decision, though their status remained uncertain days before the Fed meeting.
The race to reshape the Fed comes after Trump railed for months against the central bank and Powell for declining to heed his call for lower interest rates. Last week, Powell said the Fed remains “strongly committed to maintaining our independence.”
Stephen Miran, a top White House economic advisor who joined the Fed board last week, cast the lone dissenting vote. Miran voted in favor of a larger half-point rate cut.
Trump recently moved to fire board member Lisa Cook, who sued Trump over her attempted ouster, saying the decision violated her legal protections as an employee at the independent federal agency. Trump said he removed Cook over mortgage fraud allegations against her, which Cook has denied.
Last week, a federal judge issued a preliminary injunction requiring the Fed to let Cook continue serving in her role as a governor of the Federal Reserve System as her lawsuit moves through the courts. The Trump administration appealed the ruling to the Supreme Court.
In recent months, the economy has suffered a sharp hiring slowdown alongside a rise of inflation, setting the conditions for what economists call “stagflation.”
The economic conditions have put Fed policymakers in a bind. If the Fed raises interest rates as a means of protecting against tariff-induced inflation, it risks tipping the economy into a downturn. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a hiring slowdown, it threatens to boost spending and worsen inflation.
(NEW YORK) — The Federal Reserve cut its benchmark interest rate a quarter of a percentage point on Wednesday, opting for its first interest rate cut this year in an effort to revive the flagging labor market.
The central bank delivered a policy long-sought by President Donald Trump, though the size of the rate cut all but certainly fell short of Trump’s desired outcome. The Federal Open Market Committee (FOMC), a policymaking body at the Fed, projected two additional quarter-point rate cuts over the remainder of the year.
Five meetings and nine months have elapsed since the Fed last cut interest rates. The federal funds rate stands between 4% and 4.25%, preserving much of a sharp increase imposed in response to a pandemic-era bout of inflation.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In a statement on Wednesday, the FOMC indicated greater concern for slowing employment growth than for rising inflation.
“The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen,” the FOMC said.
The high-stakes announcement marks a flashpoint in the monthslong pressure campaign directed at the Fed by Trump.
In recent weeks, Trump has moved to fire one member of the Fed’s board of governors and secure Senate confirmation for another. Both officials were on track to be among the 12 policymakers who cast votes on the interest-rate decision, though their status remained uncertain days before the Fed meeting.
Stephen Miran, a top White House economic advisor who joined the Fed board this week, cast the lone dissenting vote. Miran voted in favor of a larger half-point rate cut.
The race to reshape the Fed comes after Trump railed for months against the central bank and its Chair Jerome Powell for declining to heed his call for lower interest rates. In July, Powell stressed the importance of political independence, saying it allows central bankers to make “very challenging decisions” based on “data.”
In a social media post on Monday, Trump reiterated his criticism of Powell, saying the Fed chair “MUST CUT INTEREST RATES, NOW, AND BIGGER THAN HE HAD IN MIND.”
In recent months, the economy has suffered a sharp hiring slowdown alongside an uptick of inflation, setting the conditions for what economists call “stagflation.”
The economic conditions have put Fed policymakers in a bind. If the Fed raises interest rates as a means of protecting against tariff-induced inflation, it risks tipping the economy into a downturn. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a hiring slowdown, it threatens to boost spending and worsen inflation.
Last month, Powell said the central bank faces a “challenging situation,” putting pressure on both sides of the Fed’s dual mission to maximize employment and control inflation.
Still, Powell said, the “balance of risks appears to be shifting” in light of a hiring slowdown made clear in a weak jobs report earlier this year that included sharp downward revisions of job gains over recent months.
Trump recently moved to fire board member Lisa Cook, who sued Trump over her attempted ouster, saying the decision violated her legal protections as an employee at the independent federal agency. Trump said he removed Cook over mortgage fraud allegations against her.
Federal law allows the president to remove a member of the Fed board “for cause,” though no president has attempted such a removal in the 112-year history of the central bank.
Last week, a federal judge issued a preliminary injunction requiring the Fed to let Cook continue serving in her role as a governor of the Federal Reserve System as her lawsuit moves through the courts.
Days later, the Trump administration filed a request with an appeals court asking to remove Cook by Monday, before the scheduled vote on interest rates. That day, an appeals court rejected Trump’s bid, clearing the path for Cook to vote at the Fed meeting. Trump may appeal the ruling to the Supreme Court.
Last month, Trump called on Cook to resign on the same day that Bill Pulte, the director of the Federal Housing Finance Agency, posted on X part of an Aug. 15 letter sent to U.S. Attorney General Pam Bondi accusing Cook of falsifying bank documents and property records to acquire more favorable loan terms, “potentially committing mortgage fraud,” the letter stated.
In a statement provided to ABC News at the time, Cook said she learned from the media about Pulte’s letter seeking a criminal referral over the mortgage application, which predated her time with the Federal Reserve.
“I have no intention of being bullied to step down from my position because of some questions raised in a tweet,” Cook said in the statement last week. “I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts.”
The Senate voted 48-47 on Monday to confirm White House economic adviser Stephen Miran’s nomination to serve as a member of the Board of Governors of the Federal Reserve, paving the way for Miran to cast a vote on interest rates.
Miran has vowed to safeguard central bank independence but said earlier this month that he does not plan to resign from his position within the Trump administration. Miran is filling a vacancy created by the early retirement of Fed board member Adrianna Kugler, whose term was set to end in January.
Miran said he plans to take an unpaid leave of absence from his current role. Miran reached the decision after “advice from counsel,” since his term on the Fed board would last four months, Miran said at a Senate hearing this month.
