With the unfortunate temporary government shutdown starting on October 1, those of us who are dependent on traditional government provided financial and economic data outlets must now rely on alternative sources to assist us in formulating our overall recommendations and thesis. I'd like to share just a few of the following positive indicators regarding the overall performance of the economy:
First off, let's discuss the health of the consumer: spending continues to grow 4.6% year on year through September [1], the year on year same store sales growth (tracked weekly) are also near 5% [2], and auto sales came in at $16MM Seasonally Adjusted Annualized Rate, which is relatively strong compared to the last few years [3]. Why is that important? The consumer is the "holy grail" of the economy and historically accounts for approximately 70% of total economic output. [4]
Second, let's check out manufacturing in the US. We have two regional manufacturing indices, Philly and NY, which just released their data in mid-October. Their latest orders were the highest since February and a big improvement since September. [5] Here's my point: A robust manufacturing sector is often correlated with a strong, innovative, and resilient economy, even if it’s not the largest sector.
Finally, let's look at fuel prices. The nationwide average gas price has dropped below $3/gallon, the first time since 2020 during COVID.[6] I think of fuel prices as an additional tax on our wallet and purses. When fuel prices go down, we have more money to spend - I know my wife likes that! General takeaway is the economy, for now, is still chugging along.
So this got me thinking, how do the capital markets perform once a temporary government shutdown has ended? Since 1994, when I started in the industry, there have been four government shutdowns (not including the current one we are in). In fact, since 1980, the average S&P 500 return in the 12 months following the government closing is 16.95%.[7] While not a guarantee, recent history tells us the capital markets should continue higher once our elected officials open the government [8], especially per the economic data I just provided.
As we look out to the month of November, besides the obvious Thanksgiving holiday, I am personally interested in seeing the economic results of Black Friday as it's considered the official start of the US Holiday shopping season. It's now been over six months since tariffs were implemented, and so far the economy has held up well. The next major test will be Black Friday.
That's it for now. I look forward to sharing my thoughts in November.
1 The Bespoke Group, Bespoke Report, Oct 16, 2025, p 15
4 https://www.usbank.com/investing/financial-perspectives/market-news/economic-recovery-status.html
5 The Bespoke Group, Bespoke Report, Oct 16, 2025, p 17