Uncertainty weighed on small business owners, but homebuilders saw some life in their industry. Here are the five things we learned from U.S. economic data released during the week ending October 17. (Note that the federal government shutdown has delayed the release of some economic data.)
Small business owner optimism declined in September. The Small Business Optimism Index dropped 2.0 points, wiping out gains from the previous two months, to a seasonally adjusted 98.8 (1986=100). The National Federation of Independent Business measure was at 91.5 a year prior. Five out of ten index components declined during the month, including significant decreases in expectations about the economy, current inventories, and anticipated real sales. Only two components—earnings trends and plans to increase employment—increased in September. The group’s measure of uncertainty was its fourth-highest reading in its 51-year history. The press release noted that business owners were “having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges.”
Homebuilder sentiment improved in October. The National Association of Homebuilders’ Housing Market Index (HMI) grew by five points to a seasonally adjusted 37. (The HMI measures the difference between the percentage of homebuilders who say the housing market is “good” and those who say it is “poor.”). October’s HMI reading was at a six-month high but still below October 2024’s 43 mark. The HMI rose in all four Census regions. The current single-family home sales index increased four points to 38, while the six-month expected sales index jumped nine points to 54, its highest reading since last January. The traffic of prospective buyers grew by four points to 25. The press release noted that “most home buyers are still on the sidelines, waiting for mortgage rates to move lower.”
The federal budget deficit contracted slightly in 2025. The Bureau of the Fiscal Service reports that the U.S. government collected $5.235 trillion in receipts during the recently completed fiscal year, a 6.4 percent increase from FY2024. Revenues from individual income taxes and social insurance/retirement taxes grew, while corporation income taxes declined. Although up 153 percent from the previous fiscal year, the $194.866 billion collected in customs duties was a minute contributor to overall government revenue. Meanwhile, the U.S. spent $7.010 trillion from October 1, 2024, to September 30, 2025, a 4.1 percent rise from the prior year. The three largest expense categories were the Department of Health and Human Services ($1.884 trillion), the Social Security Administration ($1.647 trillion), and interest payments on the federal debt ($1.216 trillion). The federal budget deficit of -$1.775 trillion decreased by 2.3 percent compared to the previous year.
Mortgage applications continued to decline in mid-October. The Mortgage Bankers Association of America’s Market Composite Index fell 1.8 percent on a seasonally adjusted basis during the week ending October 10. Refinancing activity decreased by one percent from the previous week but was still 59 percent higher than the same period last year. The home purchase mortgage application index dropped three percent for the week, yet remained 20 percent above year-ago levels. 53.6 percent of mortgage applications were for refinancing a home. The average contract rate for 30-year conforming mortgages was 6.43 percent, the same as the prior week, with 0.61 points.
Oil inventories expanded in mid-October. The Energy Information Administration estimates U.S. commercial crude oil inventories increased by 3.5 million barrels during the week ending October 10, reaching 423.8 million barrels. Inventories were down 3.2 percent compared to a year earlier. Motor gasoline inventories decreased by 0.3 million barrels to 218.8 million barrels. Despite this decline, motor gasoline inventories were 2.9 percent higher than a year earlier.
Other U.S. economic data released over the past week:
- Natural Gas Storage Report (Week ending October 10, 2025, Working Gas in Underground Storage, not seasonally adjusted): 3,721 billion cubic feet (+80 Bcf vs. prior week; +0.7% vs. a year earlier).
- Beige Book
The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.
What We Learned About the U.S. Economy Last Week 