Dowden Report November 7th, 2025

The government shutdown is getting a lot of headlines this week. Some daylight appears to have emerged that suggests a deal may come together over the next several days (fingers crossed). Getting past Tuesday's elections may help create more of an opening for the two sides to come together.

ACA exchanges going live, reduced/delayed SNAP (food stamps) benefits, military pay, travel delays, and the unions are all ratcheting up the pressure on the Senate to pass a Continuing Resolution (CR) that funds the government into 2026. The CR could then be tied to a commitment by Republicans for appropriations bills and healthcare votes early next year. This seems like the most likely path and gives us confidence that the longest government shutdown ever will be over soon. The cost of the shutdown is higher than the primary reasons for it, which makes less sense as each day passes.

 

THE GOOD:
Existing home sales increased +1.5% in September to a 4.060 million annual rate, matching consensus expectations.  Sales are up +4.1% versus a year ago. While this is good news, the current pace of 4.060 million remains near the lowest since the aftermath of the Great Financial Crisis, and well below the roughly 5.250 million annual pace that existed pre-COVID (let alone the 6.500 million pace during COVID). One step at a time, I guess.

The median price of an existing home declined to $415,200 in September (not seasonally adjusted) but is up 2.1% versus a year ago.  

(Source: First Trust | Data Watch) 

 

The ISM Non-Manufacturing index increased to 52.4 in October, beating the consensus expected 50.8. (Levels above 50 signal expansion; levels below signal contraction.)

The major measures of activity were mostly higher in October.  The new orders index rose to 56.2 from 50.4, and the business activity index increased to 54.3 from 49.9. The service sector remains resilient, with activity expanding in ten out of the last twelve months.

 (Source: First Trust | Data Watch | 11/05/25)

 

The Consumer Price Index (CPI) rose 0.3% in September, below the consensus expected +0.4%.  The CPI is up 3.0% from a year ago. The September CPI report was originally scheduled to come out October 15th, but the ongoing government shutdown delayed its release. 

Wages have been unchanged for over a year as demand for labor has weakened. With the labor market showing signs of softening and the federal shutdown ongoing, we believe this report keeps the Federal Reserve on course for another reduction in short-term rates at next month’s meeting.
(Source: LPL Financial | Daily Market Update | 11/05/25)


 

The highest reading of any category was once again the prices index, which ticked up to 70.0 in October, (Yikes).  That is the highest level since late 2022!!! Yes, not as bad as the COVID supply-chain disruptions, when the index reached the low 80s, but that isn't where we want to be, and one nobody wants to revisit 2022. 

(Source: First Trust | Data Watch | 10/24/25)


 

SUMMARY:
October saw several indices rise including new orders, business activity, and unemployment. The sector responsible for two-thirds of US output once again demonstrated its strength, as the ISM Services Index beat even the most optimistic forecast of any Economics group polled by Bloomberg and rose to an eight-month high of 52.4 in October. YAY! Good news, indeed.

 

As always, if it’s time for your review, or you just want to talk, please don’t hesitate to call or message me, I’m always available for you.