Over the past two and a half decades, the federal government has buried taxpayers under a mountain of debt, now approaching $38 trillion. During this time, the key problem has been spending, not a lack of tax revenue. Over the past 25 years, taxes have remained relatively stable as a share of GDP, while spending has continued to rise. It's estimated that spending was 23.2% of GDP in the year ending September 30 (Fiscal Year 2025) versus 17.7% in 2000. In other words, the reason there is a debt … View More
Key Takeaways In the absence of the usual monthly payroll report, the September ADP report contracted by 32k jobs, missing expectations and extending the trend of weakening employment. The September Dallas Fed Manufacturing Survey missed expectations, confirming weak growth and employment momentum. Consumer confidence fell again (from 97.8 to 94.2), reconfirming weakening labor signals. It is hard to justify the resumption of a Fed rate-cutting cycle when the economic expansion is dura… View More
Congressional Democrats have limited influence over President Trump’s policy agenda, but government funding requires 60 votes in the Senate, giving them leverage since Republicans hold just 53 seats. Votes will be used as leverage, putting the US government into a shutdown at midnight tonight. Democrats' Position: ACA Subsidies Democrats are pushing to extend enhanced Affordable Care Act (ACA) tax credits, which expire at the end of 2025. They view this as an important policy priority an… View More
Earnings Projections Revised Upward for Q3, Contrary to Historical Trends As we near the end of the third quarter this week, optimism regarding Q3 earnings growth remains strong. Estimates have been revised upward throughout the quarter, now projecting an 8.8% increase, which goes against the historical trend of downward revisions. Seven of the eleven sectors are anticipated to report positive earnings growth, with four sectors expected to see growth in the mid-to-high teens. The technology se… View More
The loss of momentum in U.S. payroll job growth has been a concern. The FOMC statement noted last week that "job gains have slowed, and the unemployment rate has edged up but remains low" and followed that up with "the Committee … judges that downside risks to employment have risen." However, initial claims falling to 231,000 (240,000 on the 4-week average) were reassuring last week. Factoring out recent noisy readings due to fraud in TX, claims indicate economy-wide firing remains limited. U… View More