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Shutdown Nears Resolution as Labor Market Softens

  • QU Economics Research Team
  • Nov 11
  • 5 min read

Weekly Market Commentary | Week of Nov 10th, 2025


A Recap of Economic and Financial Trends from the Prior Week

 


 

Last Week in Review


  • Private-sector data signaled a cooling U.S. economy, with job cuts rising sharply and consumer sentiment falling to its lowest level since 2022.


  • Lawmakers advanced a bipartisan deal to end the record-long government shutdown, aiming to restore federal operations and funding through January.


  • Global oil supply continued to outpace demand, driving a projected surplus of over 2 million barrels per day and prompting countries to expand strategic reserves.

 


Economic Recap


The U.S. economy entered November amid the longest federal government shutdown on record, heightening uncertainty across both markets and households. With official data releases suspended, investors leaned on private-sector sources to gauge labor and growth trends. The ADP National Employment Report showed private employers added 42,000 jobs in October, a modest rebound after a decline of 32,000 from the month prior. Meanwhile, Challenger, Gray & Christmas reported 153,074 announced job cuts in October, up 175% year over year and the highest for the month since 2003, bringing year-to-date layoffs to 1.1 million, 65% above 2024 levels. Challenger noted that “AI adoption, softening consumer and corporate spending, and rising costs” are driving a new wave of belt-tightening, with warehousing (47,878 cuts), technology (33,281), and consumer products (3,409) among the hardest-hit sectors. All of this aligns with the increase in the real-time unemployment rate forecast from the Chicago Fed, which rose to 4.4% in October.


Business activity reflected a similarly mixed tone: the ISM Services PMI rose to 52.4 in October (up from 50.0), signaling renewed expansion as new orders climbed to 56.2, their highest in a year, while manufacturing contracted for an eighth consecutive month, with the ISM Manufacturing PMI slipping to 48.7 from Septembers 49.1. Consumer sentiment weakened further; the University of Michigan Index fell to 50.3, its lowest since mid-2022, driven by a 17% drop in current personal finances and an 11% decline in year-ahead expected business expectations. Year-ahead inflation expectations went from 4.6% last month up to 4.7% this month.

 


Market Recap

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Source: JPMorgan Asset Management, “Weekly Market Recap” (November 10, 2025). (Chart © JPMorgan Asset Management. Chart used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)


U.S. equities snapped a three-week winning streak. The Nasdaq Composite fell 3.03%, its steepest weekly loss since April, while the S&P 500 declined 1.61% and the Dow Jones Industrial Average slipped 1.21%. Growth stocks underperformed sharply, the Russell 1000 Growth Index fell 2.93%, lagging the Russell 1000 Value Index at -0.03%. Investor sentiment was further dampened by shutdown-related disruptions, as the Federal Aviation Administration ordered airlines to reduce flight traffic amid air traffic controller shortages. Abroad, Europe’s STOXX 600 fell 1.24%, with Germany’s DAX down 1.62% and France’s CAC 40 off 2.10%, while in Asia, Japan’s Nikkei 225 slid 4.07% on profit-taking in chipmakers and China’s CSI 300 rose 0.82% amid easing U.S.-China trade tensions. The MSCI EAFE Index fell 0.76%, and the MSCI Emerging Markets Index declined 1.39%. In fixed income, U.S. Treasuries posted modest gains as intermediate yields eased, while high yield bonds underperformed in line with equity market weakness.


**Note: The MSCI EAFE Index tracks large- and mid-cap companies across developed markets in Europe, Australasia, and the Far East, excluding the U.S. and Canada. The MSCI Emerging Markets Index measures equity performance in developing economies, including countries such as China, India, and Brazil, and is widely used to benchmark global growth exposure.

 


Calendar Events


Economic Data:


  • Nov. 13 (Thurs): Initial Jobless Claims; Consumer Price Index (CPI, Oct.); Core CPI; Monthly Federal Budget Balance (Oct.)

  • Nov. 14 (Fri): Producer Price Index (PPI, Oct.)


Major Corporate Earnings:


  • Nov. 13 (Thurs): The Walt Disney Company (DIS) - Q4 2025 Earnings Announcement


**Note: Some releases are suspended due to the federal government shutdown.

 


Market Themes



Senators reached a bipartisan deal late Sunday to end the record-long U.S. government shutdown, advancing a funding measure that passed its first Senate vote 60–40. The agreement would extend federal funding through January 30 and includes a “minibus” package to fund agencies like the Department of Agriculture through next fall. A key element of the deal fully restores and secures funding for the Supplemental Nutrition Assistance Program (SNAP) through September 2026, addressing one of the main sticking points in negotiations after millions of households faced benefit uncertainty during the shutdown. The plan also reverses layoff notifications for federal workers issued during the stoppage. While Democrats conceded on extending Affordable Care Act subsidies, leadership promised a separate vote in December. The proposal still awaits approval from the House and the President’s signature before officially reopening the government.



Global oil storage demand is accelerating as record production collides with softening consumption, forcing producers and governments to expand capacity amid geopolitical and energy-security pressures. According to Astute Analytica, the global oil storage market (valued at US$11.6 billion in 2024) is projected to reach US$16.7 billion by 2033, growing at a 4.1% CAGR. The surplus of crude is widening, with global output expected to exceed demand by 2.3 million barrels per day (mb/d) in 2025 and potentially 4.0 mb/d in 2026, leading to inventory builds averaging 2.6 mb/d by late 2025. Governments are responding by expanding Strategic Petroleum Reserve (SPR) capacity to strengthen energy security, led by China, which is adding 11 new reserve sites totaling 169 million barrels. Industry trends point toward increased digitalization, AI integration, and asset consolidation to enhance efficiency and manage costs, while geopolitical instability and shifting trade routes continue to challenge global storage logistics.

 


Chart of the Week


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Source: J.P. Morgan Asset Management, Guide to the Markets – U.S., November 2025. (Chart © J.P. Morgan Asset Management. Chart used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)


The chart to the left shows that U.S. labor productivity growth has strengthened in recent years, rising from post-2010 lows as new technologies, including Generative AI, begin to support efficiency gains. Historically, productivity growth has accelerated during major innovation cycles such as electrification, the automobile boom, and the internet era, and current trends suggest another upward phase may be forming. On the right, AI adoption among U.S. businesses has expanded rapidly, climbing from 3% in 2023 to roughly 10% in 2025. Adoption is highest in information (30%), professional and technical services (23%), and finance and insurance (17%), reflecting growing integration of AI in data and knowledge-based industries.


 

Market Outlook


Markets remain cautiously optimistic that Congress will finalize an agreement to end the record-length government shutdown. The extended closure has disrupted federal operations, delayed key data releases, and weighed on overall confidence. A resolution would help restore normal economic functions and reduce near-term uncertainty for businesses and investors. Until then, market sentiment is likely to stay restrained as participants await confirmation that the government is set to fully reopen.







Sources




BlackRock Investment Institute. Weekly Investment Commentary: AI front and center at our 2026 Forum. November 10, 2025.https://www.blackrock.com/us/individual/literature/market-commentary/weekly-investment-commentary-en-us-20251110-ai-front-and-center-at-our-2026-forum.pdf


J.P. Morgan Asset Management. Guide to the Markets – U.S. November 2025.https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/guide-to-the-markets/




Institute for Supply Management (ISM). Manufacturing PMI – October 2025.https://www.ismworld.org/globalassets/pub/research-and-surveys/rob/pmi/boo202510pmi.pdf


Institute for Supply Management (ISM). Services PMI – October 2025.https://www.ismworld.org/globalassets/pub/research-and surveys/rob/nmi/vot3rob202510svcs.pdf


University of Michigan. Survey of Consumers.https://www.sca.isr.umich.edu/

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