Key economic indicators reflect that the U.S. economy exhibited a blend of resilience and emerging challenges in September 2025. The Intellizence AI platform for company and market intelligence monitors hundreds of growth and risk signals in thousands of companies daily. Here is the executive summary of the U.S. macroeconomic indicators and trending topics for September 2025.
US Macroeconomic Indicators
Federal Reserve Cuts Interest Rates by 0.25 Percentage Points
At its September 2025 meeting, the Federal Reserve reduced the federal funds rate by 25 basis points, setting a new target range of 4.00% to 4.25%, down from 4.25% to 4.50%. This marks the first interest rate cut since December 2024, signaling a shift in monetary policy.
The move reflects the Fed’s growing concerns over a cooling labor market, slower job creation, and rising risks to overall economic growth. While inflation remains above the central bank’s 2% target, policymakers emphasized a balanced, data-driven approach to future decisions.
Officials also indicated that additional rate cuts may follow if economic indicators — particularly employment and inflation trends — continue to justify a more accommodative stance.
The US Economy Lost 32,000 Jobs in September 2025
Private payrolls dropped sharply in September, adding to uncertainty about the health of the U.S. economy as both policymakers and investors attempt to gauge labor market conditions during the ongoing government shutdown. The Bureau of Labor Statistics (BLS) has not released its official monthly jobs report so far due to the shutdown. Based on reports published by alternative data sources, such as the ADP private-sector employment report, US private-sector businesses lost 32,000 jobs in September.
Services PMI® at 50% in September 2025
The Services PMI® (Purchasing Managers’ Index) measures the performance of the U.S. services sector, which includes industries such as finance, healthcare, retail, and transportation — essentially the backbone of the modern economy.
In September, the Services PMI® came in exactly at 50.0, meaning economic activity in the services sector was flat — neither growing nor declining. This is significant because it’s the first time since January 2010 (over 15 years) that the index has hit the breakeven mark, suggesting that demand, new orders, and business activity have stalled.
According to the nation’s purchasing and supply executives in the latest Services ISM Report On Business, in simpler terms:
- The U.S. services economy — which drives most of the nation’s GDP — stopped growing in September.
- This stagnation adds to concerns about a broader economic slowdown, especially when combined with weak job growth and the Federal Reserve’s recent interest rate cut to support the economy.
Ten industries reported growth in September, two fewer than in August: Accommodation & Food Services; Health Care & Social Assistance; Other Services; Information; Public Administration; Educational Services; Wholesale Trade; Finance & Insurance; Transportation & Warehousing; and Utilities.
The seven industries reporting a contraction in September — listed in order — are: Mining; Agriculture, Forestry, Fishing & Hunting; Construction; Management of Companies & Support Services; Professional, Scientific & Technical Services; Retail Trade; and Real Estate, Rental & Leasing.
Note: Above 50 indicates expansion, and below 50 indicates contraction.
Manufacturing PMI® at 49.1% in September 2025
Economic activity in the U.S. manufacturing sector contracted for the seventh consecutive month in September 2025, with the PMI registering 49.1% (up slightly from 48.7% in August). While the overall economy continued expanding for the 65th month, manufacturing remains in contraction territory, says the nation’s supply executives in the latest ISM® Manufacturing PMI® Report.
Key Indicators:
- New Orders: Declined to 48.9% (from 51.4%), returning to contraction after one month of growth
- Production: Improved to 51.0% (from 47.8%), the most significant positive factor
- Employment: 45.3% (eighth consecutive month of contraction)
- Prices: 61.9% (indicating continued price increases for 12 straight months)
- Supplier Deliveries: 52.6% (slowing for the second consecutive month)
Only five industries reported growth: Petroleum & Coal Products, Primary Metals, Textile Mills, Fabricated Metal Products, and Miscellaneous Manufacturing.
11 industries contracted: Wood Products, Apparel, Leather & Allied Products; Plastics & Rubber Products; Paper Products; Furniture & Related Products; Chemical Products; Electrical Equipment, Appliances & Components; Transportation Equipment; Nonmetallic Mineral Products; Machinery; and Computer & Electronic Products.
The report indicates manufacturing continues to struggle with demand uncertainty driven primarily by tariff policy, despite some stabilization in production levels.
Note: A Manufacturing PMI® above 42.5 percent generally indicates an expansion of the overall economy.
The US Inflation Rate was at 2.9%
The annual inflation rate for the United States was 2.9% for the 12 months ending August, compared to 2.7% previously, according to U.S. Labor Department data published on September 11, 2025. BLS will publish the September 2025 Consumer Price Index (CPI) on October 24, 2025. No other releases will be produced until the resumption of regular government services.
Note– The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected monthly in 75 urban areas across the country, from about 6,000 housing units and approximately 22,000 retail establishments (department stores, supermarkets, hospitals, filling stations, and other stores and service establishments). The Consumer Price Index (CPI) measures the change in prices consumers pay for goods and services.
US Economic, Housing, and Mortgage Market Outlook – September 2025
Based on Fannie Mae’s September 2025 Economic and Housing Outlook, here’s the comprehensive forecast:
Mortgage rates are forecast to end 2025 and 2026 at 6.4 percent and 5.9 percent, respectively. This represents a gradual decline from current levels, with rates expected to move below 6% by the end of 2026.
New and existing home sales are projected to total 4.72 million in 2025 and 5.16 million in 2026. This represents an anticipated increase of approximately 9.3% from 2025 to 2026 as mortgage rates decline.
Key Market Dynamics
Lock-in Effect: As of the first quarter of 2025, 69% of outstanding mortgages had a contract rate of 5% or less, and 24% had a rate less than 3%. This creates a significant “lock-in” effect, discouraging current homeowners from selling.
Affordability Challenges: Only 26% of homes were affordable for median renters in the second quarter of 2025 — down from 28% in late 2024, according to S&P Global US Manufacturing PMI® News Release, indicating worsening affordability conditions for first-time buyers.
Trending Topics:
US Job Cuts Surged in September 2025
According to Intellizence layoff data, in September 2025, U.S.-based employers announced 54,064 job cuts, a 37% drop from the 85,979 cuts announced in August. Economic uncertainties, technological advancements, and organizational restructuring drove the layoffs across sectors.
Government: The Government sector has announced significant job cuts this year, impacting 289,363 Federal workers.
- Technology: Through September, Technology companies have announced 107,878 job cuts, including 5,639 last month.
- Retail: Retailers have announced 86,233 job cuts through September, a 200% increase compared to cuts announced during the same period last year
Some significant layoff announcements included Bosch (13,000), Accenture (11,000), Novo Nordisk (9,000), Lufthansa (4,000), ANZ Bank (3,500) & more.
Retail Sales Rose 0.4% in September 2025
Retail sales in the United States rose 0.4% in September to $714.4 billion, exceeding analyst expectations and outpacing the previous month’s modest 0.1% gain. This demonstrates resilient consumer demand despite elevated interest rates.
Key Trends
- Strong Online Sales: Online retailers continued showing double-digit growth rates year-over-year, indicating continued strength in e-commerce.
- Food Service Growth: Restaurants and drinking establishments showed robust 6.5% year-over-year growth, suggesting consumers are still spending on dining out.
- Labor Market Concerns: Labor market headwinds — including rising unemployment, fewer job openings, and slower wage growth — are expected to weigh on the US Housing Market in 2025, particularly in terms of mortgage rates, Affordability, and Growth Trends.
The September reading suggests consumers remained resilient heading into Q4 2025, though caution persists about sustainability given broader economic headwinds.RetryClaude can make mistakes. Please double-check cited sources.
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