U.S. Jobless Claims Rebound, but Holiday Distortions Cloud the Picture
U.S. initial jobless claims rebounded to 236K, above the 220K expected by economists. The prior week was also revised higher to 192K from 191K, though that earlier reading remains unusually low. It’s important to recall that last week’s sharp drop to 191K was widely viewed as an outlier, heavily influenced by the Thanksgiving holiday, which often disrupts seasonal adjustments and temporarily suppresses claims activity. The day-to-day signals less of a robust employment picture which is more in line with ADP data, and some of the other surveyed data.
Continuing claims provide additional context. Last week’s total was 1.939 million, but the latest report — which also covers the Thanksgiving period — fell to 1.838 million versus 1.947 million expected. On the surface, this would normally signal a stronger labor market, as fewer individuals are remaining on unemployment benefits. However, just like the initial claims figures, these numbers are distorted by holiday effects, making it difficult to draw firm conclusions about the underlying trend.
Taken together, today’s data suggest some rebound from last week’s artificially low readings, but traders and policymakers will need to wait for post-holiday, normalized data to get a clearer picture of true labor-market momentum.
US trade deficit for September -52.8 billion versus -63.3 billion estimate
U.S. trade figures for September released by the BLS this morning, showed meaningful improvement as exports rose to $289.3 billion, an increase of $8.4 billion from August, while imports climbed to $342.1 billion, up a more modest $1.9 billion for the month.
The goods and services deficit narrowed as a result, driven primarily by a $7.1 billion reduction in the goods deficit to $79.0 billion, although this was partially offset by a $0.6 billion decline in the services surplus to $26.2 billion.
Despite the monthly improvement, the broader trend remains one of widening trade gaps: year-to-date, the overall deficit has increased $112.6 billion (17.2%) compared to the same period in 2024. Both sides of the ledger have grown, with exports up $125.1 billion (5.2%) but imports rising even faster, up $237.7 billion (7.7%), suggesting domestic demand continues to outpace foreign demand for U.S. goods and services.
U.S. Trade Balance by Country: September Shows Sharp Shifts in Key Bilateral Flows
The country-level breakdown of September trade data revealed dramatic swings in several major bilateral balances.
The largest U.S. trade surpluses were recorded with Switzerland ($6.6B), the Netherlands ($5.9B), South and Central America ($5.0B), Hong Kong ($2.1B), Belgium ($1.4B), Brazil ($1.3B), the United Kingdom ($1.1B), and smaller surpluses with Australia, Saudi Arabia, and Singapore.
The standout move came from Switzerland, where the U.S. shifted from a $0.1B deficit in August to a $6.6B surplus in September, driven by a $7.1B surge in exports to $10.8B, while imports edged only slightly higher. The Trump Administration enacted a surprise 39% tariff on Switzerland underscoring the decline in imports. However, recent negotiations between the U.S. and Switzerland, the two countries reached a "framework agreement" to reduce those tariffs sharply to 15% from 39%.
This reduction, which brings Swiss tariffs in line with the rate applied to European Union exporters, is expected to be implemented retroactively from November 14, 2025, and will significantly lower the cost burden on Swiss exports such as pharmaceuticals, watches and precision instruments.
On the deficit side, the largest trade gaps continued with Ireland ($18.2B), Mexico ($17.8B), the European Union ($17.8B), Vietnam ($14.4B), and China ($11.4B), followed by notable deficits with Taiwan, Canada, Germany, Japan, South Korea, and India.
The deficit with China narrowed by $4.0B, helped by a $3.9B drop in imports to $20.1B, while U.S. exports to China rose modestly. In contrast, the deficit with Ireland widened sharply by $15.3B as imports surged $14.8B to $19.9B and exports slipped.
Overall, September’s country-level data highlight a mix of improving balances with key Asian partners like China, alongside sizable deteriorations with import-heavy markets such as Ireland and Mexico.
Powell Signals Confidence as Fed Cuts Rates and Tariff Effects Dominate Inflation Outlook
The Federal Reserve cut rates by 25 basis points, with Chair Powell emphasizing that the economy — and monetary policy — is now in “a good place.” Powell noted that if not for tariffs, inflation would already be at the Fed’s 2% target, describing the tariff impact as a one-time price adjustment rather than a sustained inflation driver. If that shock fades in the second year of the Trump administration, Powell argued, inflation should naturally drift back toward 2%. He added that disinflation in services continues to progress, while goods inflation remains elevated primarily because of tariff-related cost pressures, reinforcing the message that underlying inflation trends are moving in the right direction once policy distortions unwind.
