25-Sep-2025 in Focus

September 25 brought a quiet pullback. The GDP data was revised upwards, showing the economy grew at an annualized rate of 3.8% from April to June, well above the 3% initially reported. This difference came largely from stronger consumer activity. Personal consumption expenditures rose at an annualized pace of 2.5%, up sharply from the earlier estimate of 1.6%.

Contrary to the rosy picture painted by these figures, higher spending does not necessarily mean households are buying more. Some economists caution that part of this increase may simply reflect higher prices, rather than genuine strength in demand.

And the market seems to agree, as shown in yesterday’s performance.

Asset / Index	Close	Change	% Move
S&P 500	6,603.85	-34.12	-0.51%
Nasdaq	22,376.11	-121.75	-0.54%
Dow Jones	45,950.27	-171.01	-0.37%
Bitcoin (BTC)	108,994.49	-4,312.51	-3.8%

As can be seen, the pullback was broad. US equities all closed lower, led by Nasdaq’s 0.54% decline. Cryptocurrencies sold off more sharply, with Bitcoin losing 3.8%.

Jobs Data vs GDP Data

The contrast between the labor and growth data speaks volumes. Whilst GDP was revised up to 3.8% for Q2, labor market showed slower hiring. The figures reinforce this split. Weekly jobless claims are steady at 218,000, pointing to limited layoffs. Yet only 22,000 jobs were created in August and 911,000 jobs were removed from prior totals after revisions. The unemployment rate had edged up to 4.3%.

This suggests that the labor market is currently in limbo, not shedding workers, nor adding new ones. Another fact to consider is that the claims data only reflects those eligible for benefits. Stress in gig and contract roles may not show up in the official numbers.

All Eyes on PCE

The next data point that matters most is the Personal Consumption Expenditure (PCE) price index. September’s release, covering August, is due today.

The PCE data will either confirm or contradict the narrative built by GDP and jobs. If the PCE comes in soft, it would signal that inflationary pressure is easing despite resilient growth. This would prompt the Fed to consider further rate cuts later this year. On the flip side, it would reinforce the case for them to keep rates higher for longer, even as hiring cools.

Markets are now caught between. With GDP on one hand supporting tight policy, while the job data suggesting otherwise. The PCE is the tie-breaker, and until that print lands, traders are left to balance two conflicting signals. And we know how traders dislike uncertainty.

Closing Thoughts

Stronger growth figures met weaker jobs data, and the result was confusion rather than confidence. With the PCE report as the next marker, the path ahead remains uncertain. For investors, the lesson is clear. Stay balanced, keep a margin of safety, and remember that resilience on paper can still feel fragile in practice.