Weekly Economic Report 11.21.25

The first government data since the shutdown was released this week – and it reinforced our view that the US economy has downshifted to a lower level of actual and potential growth due to immigration reform. The run of anecdotes, company reports and foreign data also fall in line with our view that the US economy cannot have a recession without a deeper downturn elsewhere – as we can export our pain. The long-delayed August trade data showed a sharp reduction in US imports due to tariffs. Thus, while US optimism is cooling as tariff-induced inflation lingers, factory floors across Asia have slumped as the Chinese and Japanese economies both faltered. Malaysia, Thailand and South Korea all have reported weakening fundamentals, as big Asian exporters lost access to the US, and passed their pain down to local employees. The global correction has helped push WTI under $60 a barrel. It has also sparked calls for more stimulus. Japan has approved a huge $135 billion, or more than 3% of GDP, package. China is said to be considering more real estate related support. Add in the European defense stimulus – and the outlook for 2026 is better globally.

EU11-21-2025.pdf

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