Both the manufacturing and service sectors were lagging in September. (Note that the federal government shutdown has delayed the release of some economic data, including the September payrolls report.) Here are the five things we learned from U.S. economic data released during the week ending October 3.
Manufacturing activity contracted again in September. The Manufacturing PMI added 4/10ths of a point to 49.1. Even with the increase, the Institute for Supply Management measure has not surpassed 50.0—the threshold between an expanding and contracting manufacturing sector—for seven consecutive months. Components for production and employment increased, while those for new orders and inventories decreased. Only five manufacturing industries reported growth, led by petroleum/coal products, primary metals, and textile mills. Among the 11 industries experiencing declines were wood products, apparel, and leather products.
Purchasing managers also say that the service sector activity was flat in September. The Institute for Supply Management’s Services PMI dropped two points to 50.0. A reading of 50.0 shows that the U.S. service sector neither grew nor shrank during the month. Measures for business activity/production, new orders, and inventories declined sharply. The employment index slightly increased. Ten service sector industries grew, including accommodation/food services, health care/social assistance, and information. Seven industries reported a decrease in activity, including mining, agriculture, and construction.
Hiring slowed while the number of unfilled jobs remained steady in August. There were a seasonally adjusted 7.227 million open jobs, up 19,000 for the month but down 5.5 percent from a year earlier. The Bureau of Labor Statistics report shows the private sector with 6.457 million unfilled jobs, with at least a million open positions in healthcare/social assistance, professional/business services, and accommodation/food services. The manufacturing sector reported being unable to fill 409,000 jobs. Employers filled 5.126 million jobs, down 114,000 for the month and 2.0 percent from August 2024. The private sector hired 4.805 million workers, including more than a million in professional/business services. In August, 5.111 million people separated from their jobs, a decline of 110,000 for the month and 1.1 percent from a year earlier. This included 3.091 million people who quit (-75,000 versus July 2025) and 1.725 million laid-off workers (-62,000 versus July 2025).
Consumer sentiment waned in September. The Conference Board’s Consumer Confidence Index dropped 3.6 points to a seasonally adjusted 94.2 (1985=100). The current conditions index fell sharply by 7.0 points to 125.4, while the expectations index decreased more modestly by 1.3 points to 73.4. An expectations reading below 80 “typically signals a recession ahead,” according to the press release. The Conference Board also pointed out that prices and inflation were “the main topic influencing consumers’ views of the economy.”
More homes were under contract to be sold in August. The National Association of Realtors’ Pending Home Sales Index increased 4.0 percent to a seasonally adjusted 74.7 (2001=100). The index was 3.8 percent higher than the same period last year. It grew in the Midwest (+8.7 percent), West (+5.0 percent), and South (+3.1 percent), but declined 1.1 percent in the Northeast. The index showed positive year-over-year comparisons in all four Census regions, ranging from a 0.2 percent increase in the West to a 6.7 percent rise in the Midwest. The press release noted that “[l]ower mortgage rates are enabling more homebuyers to go under contract.”
Other U.S. economic data released over the past week:
- FHFA House Price Index (July 2025, Purchase-Only Index, seasonally adjusted): -0.1% vs. June 2025; +2.3% vs. July 2024.
- S&P Home Price Index (July 2025, National Index, seasonally adjusted): -0.1% vs. June 2025; +1.7% vs. July 2024.
- Agricultural Prices (August 2025, Prices Received by Farmers, not seasonally adjusted): +1.0% vs. July 2025; +7.2% vs. August 2024.
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What We Learned About the U.S. Economy Last Week 