Economic Insights Blog

Early corporate earnings season underscores a widening divide in U.S. consumer spending. Affluent households are splurging on cars, sneakers and everyday luxuries, powering profits at companies like Coca‑Cola, 3M and General Motors, while middle‑ and lower‑income consumers continue to pinch pennies amid high inflation and mortgage rates. With nearly nine in ten reporting S&P 500 firms beating expectations, markets remain buoyant, but the government shutdown’s data blackout and persistent tariff pressures leave policymakers guessing about the broader economy’s health.

With official data still frozen by a 20‑day government shutdown, the Federal Reserve is preparing to cut interest rates while “flying blind.” Policymakers worry about persistent inflation even as job growth remains weak and consumer spending shows cracks. Meanwhile, Wall Street and global markets staged a sharp rally on optimism over corporate earnings and easing trade tensions, and the White House signaled that a funding deal might end the shutdown within days. For everyday Americans, high mortgage rates and price pressures continue to strain budgets despite hopes for lower borrowing costs.

The Federal Reserve’s latest Beige Book paints a picture of an economy that is flat overall but weakening in important areas. Companies are trimming staff, consumer spending is slipping, and tariffs are pushing prices higher. At the same time, Wall Street banks are reporting blowout profits, investment in artificial intelligence is booming, and higher-income households are keeping retailers afloat. With official data frozen by a government shutdown, these anecdotes carry extra weight as policymakers weigh their next moves.

Federal Reserve Chair Jerome Powell warned that the U.S. economy sits between faster growth and a weakening labour market, while the International Monetary Fund cautioned of a potential "disorderly" global market correction. A U.S. government shutdown has cut off official economic data, leaving global policymakers to fly blind; trade tensions pushed Wall Street’s fear gauge higher, and French luxury group LVMH surprised investors with a rare sales uptick.

In October 2, 2025, the eSNAP score fell sharply from 72 to 62. Here’s why — and why it reflects growing risks beneath the surface rather than an overnight collapse.

The eSNAP dashboard shows a healthier overall score at 72/100, but household fragility, rising debt, and weak housing keep the economy at moderate risk.

The eSNAP dashboard shows steady growth and controlled inflation, but rising debt and weak savings highlight household financial stress.

Help your kids understand money early by teaching them the difference between assets and liabilities. A simple lesson that builds lifelong wealth habits.

The Federal Reserve's latest interest rate decision signals a pivotal shift in monetary policy. Here's how it affects stocks, bonds, and your investment strategy.

The Federal Reserve's latest interest rate decision signals a pivotal shift in monetary policy. Here's how it affects stocks, bonds, and your investment strategy.