As we enter the final quarter of the year, the first Friday of the month typically brings the release of Non-Farm Payrolls and unemployment data. However, this month’s figures are expected to be delayed due to the first US government shutdown in six years. Notably, the last shutdown which occurred during President Trump’s first term, lasted 35 days and was the second of his presidency.
Let’s rewind to Tuesday, when a 55–45 vote in the Senate reflected Congress’s failure to pass funding legislation for the new fiscal year. This triggered the Anti-Deficiency Act, which prohibits federal agencies from spending money without congressional approval. The primary sticking point was healthcare: the Senate fell short of the 60 votes needed to advance the bill, as Democrats demanded an extension of medical care subsidies, and the reversal of Medicaid cuts made earlier in the year.
The shutdown has resulted in 750,000 workers being furloughed, some without pay, and has caused delays to key reports from the Bureau of Labor Statistics. As a result, we’ll be without Non-Farm Payrolls, unemployment figures, and weekly jobless claims. There is hope the shutdown won’t last much longer and the data will be available in time for the US Federal Reserve’s next meeting at the end of the month.
We did receive ADP Non-Farm Employment Change data which estimates the change in the number of employed people during the previous month. The figure surprised to the downside, coming in at -32,000. Normally the market doesn’t pay too much attention to ADP jobs data, instead focusing on Non-Farm Payrolls data, however, in the absence of this, ADP data is all the market has to digest, and it was weak.
Elon Musk, as the former head of the Department of Government Efficiency (D.O.G.E), would likely have been proud: over 150,000 federal employees have accepted buyouts from the US Government. This year marks the largest single exodus of civil servants in nearly 80 years, following President Trump’s push to downsize the federal workforce, citing concerns over its scale and inefficiency. The buyouts spanned multiple sectors, most notably affecting healthcare programmes and NASA’s space initiatives.
Eurozone inflation rose to 2.2% in September, in line with market expectations, as price pressures slightly increased across the bloc’s largest economies — Germany, Spain, France, and Italy. The European Central Bank has held interest rates steady since June, following a significant cutting cycle, and has signalled no urgency to adjust policy further. While there were concerns that the 15% tariff rate set by the US might impact the EU economy, President Lagarde remarked that “the risks to inflation appear to be controlled.” Famous last words?
Spotify was founded in 2006, during a period when the music industry was grappling with years of sluggish sales, rampant online piracy, and Apple iTunes’ near-monopoly. Co-founder Daniel Ek’s vision of streaming music rather than relying on downloads transformed the industry, establishing Spotify as a $145bn powerhouse today. This week, Mr Ek announced he would be stepping down as CEO, turning his attention to funding new ventures “that can make a difference”. His venture capital firm, Prima Materia, is set to invest over $1bn in European “moonshot” projects — early-stage start-ups focused on solving complex problems through artificial intelligence (AI). Spotify shares are up over 50% year to date.
Despite the US shutdown, markets continued to climb the wall of worry, making new highs once again this week. It wasn’t just the US equity market performing well, here in the UK it was a positive week for equities, while gold broke through $3,900 an ounce.
Nathan Amaning, Investment Analyst
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