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- You Survived The Government Shutdown ... Here's Your Prize
You Survived The Government Shutdown ... Here's Your Prize
The Macro Institute's Weekly Economic Primer
The Macro Institute
November 17, 2025
In partnership with
It will take some time for the release of official government data to normalize following the shutdown. That said, several interesting leading indicators are on deck this week that should offer valuable insights. Monday brings the NY Fed’s Empire Index, while Thursday delivers two more regional PMIs from the Philly Fed and Kansas City Fed. Then on Tuesday, the NAHB Index will shed light on housing market trends.
We should also see the Conference Board’s Leading Economic Index (LEI) on Thursday now that government data inputs are once again available. As we’ve noted before, the LEI has had a poor track record this cycle and is overdue for a review. We modified the series, using the Vacancy Rate (reflecting the growing importance of job openings) in place of Consumer Expectations (unusually weak this cycle) and this appears to restore much of its usefulness as an anticipatory gauge of the economy.
We’ll update our version when the data becomes available but given the S&P 500’s recent loss of momentum, we suspect the results will lean to the softer side.
The Macro Week In Review
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The Macro Week Ahead
🐌 No-Mentum November
On a month-to-date basis, Momentum as an equity market factor is down roughly 3%. At first glance, that may not sound dramatic, but in a cutthroat investment industry, every basis point counts. Its quasi-counterpart, Low Volatility, is up about 2% over the same period suggesting that investors are becoming more cautious, rotating away from high-flyers toward stability.
Given the overlap between Momentum and high-P/E stocks, the factor can occasionally move inversely to interest rates. At the start of November, markets priced in a 90% chance of a 25-bps rate cut in December. By last Friday, those odds had fallen to 50/50. This helps explain the underperformance of Momentum and other rate-sensitive assets such as Large-Cap Growth (-2.9%), Bitcoin (-17%), and Semiconductors (-5%).
At the last FOMC press conference, the Chairman’s comment that a December cut wasn’t guaranteed sparked fears of a hawkish pivot. That concern was reinforced over the past weeks as Collins, Bostic, Musalem, and Kashkari each emphasized that inflation remains elevated and that cutting too soon could reignite it.
The Fed won’t meet again until December 10th, but several key employment and inflation data releases will shape expectations in the meantime. The challenge is that some of those releases may not even occur. The White House indicated that certain October figures might never be published, complicating the Fed’s decision making and increasing the risks of a policy misstep.
📆 The Week Ahead
The November Empire State Manufacturing Index arrives on Monday at 8:30 am, and its recent trend since March has been positive. Later in the week, we’ll get the Philly Fed and Kansas City Fed Manufacturing Indices. The former weakened sharply last month, while the latter has been improving. Because regional PMIs can be noisy month-to-month, we view them as useful supplements to broader measures like the ISM Manufacturing Index.
Within these reports, subcomponents such as Prices Paid are more telling this cycle. This measure serves as a leading indicator of inflation and will reveal whether input costs are continuing to cool from their post-tariff highs. Employment-related components also bear watching given increasingly bearish survey commentary on hiring and capex plans under the new global trade regime.
Housing remains one of the more compelling macro stories as the White House explores ways to tackle affordability to ease broader inflation. Ideas floated last week including a 50-year mortgage and portable mortgage rates gained little traction. Despite a roughly 100-bps decline in the 30-year rate since January, housing affordability remains at record lows. At the same time the average age of a new home buyer has climbed to 40, and consumer sentiment continues to erode.
We expect housing data to remain soft in the near term. The NAHB Housing Market Index, due Tuesday at 10:00 am, carries a consensus estimate of 35, which is in line with its three-year range. A modest decline in mortgage rates could spur some thawing, but without a sustained drop, housing sentiment likely stays subdued.
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