Economy News: Your Weekly Update with Pennington Capital (September 15-22, 2025)

Welcome to the Economy News section of Pennington Capital. This weekly update covers macroeconomic indicators, policy shifts, and global developments shaping growth, inflation, and labor markets. 

For the week ending September 22, 2025, the U.S. economy showed signs of moderation, with August jobs data revealing only 22,000 added (vs. 76,500 expected) and unemployment ticking up to 4.3%—the highest since October 2021—confirming a hiring slowdown.

China's August factory output and retail sales hit weakest growth since last year, casting doubt on its 5% target, while global PMI surveys on September 22 signal resilience but persistent uncertainty.

Amid the Fed's September 17 rate cut to 4.00-4.25% and tariffs adding 0.4pp to 2.1% PCE inflation, forecasts for 1.9% U.S. GDP growth hold, but immigration policies may further slow labor markets.

Informed by trusted sources like Reuters, CNBC, and S&P Global, this digest highlights top stories, trends, and implications. Whether you're adjusting bonds or hedging equities, stay informed for smarter decisions.

1. Economy Overview: Key Highlights for the Week

The week featured U.S. labor weakness, China's slowdown, and central bank previews, with global growth forecasts at 3.3% for 2025 unchanged but downside risks from trade and policy shifts.

• U.S. Labor Slowdown: August nonfarm payrolls added just 22,000 jobs (vs. 76,500 expected), unemployment rose to 4.3% (highest since 2021), and revisions showed 1 million fewer jobs created pre-March 2025, signaling cooling amid immigration curbs.

• China's Slump: Factory output and retail sales grew at weakest pace since last year (August), raising doubts on 5% growth target and pressuring stimulus.

• Central Bank Focus: Fed's September 17 cut to 4.00-4.25% held, but dot plot shows aggressive 2025 easing; PMI previews for September 22 signal mixed global resilience.

• Global Trade: U.S.-China TikTok deal eases tensions, but tariffs slow manufacturing; IMF holds 3.3% 2025 growth forecast.

Pro Tip: With U.S. jobs cooling, favor defensive sectors like utilities (XLU) and Treasuries; monitor China's stimulus for commodity plays.

2. U.S. Economy: Labor Data Signals Slowdown

August jobs report underscored a cooling labor market, with hiring at 22,000 (far below 76,500 expected) and unemployment at 4.3%—highest since 2021—revised revisions showing 1 million fewer jobs pre-March 2025.

• Details: Payroll revisions cut 818,000 jobs from March 2024-August 2025; native-born unemployment rose due to immigration curbs.

• Sectors: Healthcare +20,000, manufacturing/construction -25,000.

• Implications: Slows GDP to 1.9%; boosts September cut odds to 100%, but aggressive 2025 easing (dot plot shows one outlier for deeper cuts).

• Market Reaction: Stocks mixed (S&P +0.96%), bonds rallied (10-year yield down 7.2 bps to 4.898%).

Key Story: August's 22,000 job adds and 4.3% unemployment—revised down 818,000 prior jobs—confirm slowdown, per BLS September 5, prompting BofA to forecast September/December cuts.

3. Global Economy: China's Slump and Central Bank Previews

China's August data showed weakest factory output and retail sales since last year, doubting 5% growth target, while PMI previews for September 22 signal mixed resilience.

• China's Weakness: Factory output +3.6% (vs. 4.5% expected), retail sales +2.1% (weakest since Dec 2023), keeping pressure for stimulus; exports +6.1% YoY but imports -0.5%.

• Central Banks: Fed's cut held; BOJ hikes to 0.5% September 19, ECB to 1.75% October; PMI for September 22 to gauge manufacturing.

• Global Growth: IMF holds 3.3% 2025 forecast, but China's slump risks downside.

• Trade Ties: U.S.-China TikTok deal eases tensions, but tariffs slow global manufacturing.

Key Story: China's August factory output at +3.6% and retail sales +2.1%—weakest since Dec 2023—cast doubt on 5% growth, per Reuters September 15, pressuring stimulus amid U.S. trade thaw.

4. Economy Implications: What It Means for Investors

• Labor Cooling: 4.3% unemployment boosts bonds (TLT ETF); favor defensives like utilities (XLU) over cyclicals.

• China Slowdown: Risks commodity drops; short copper (CPER) or buy gold (GLD) for safe-haven.

• Central Banks: Fed/BOJ easing supports USD weakness; long EUR/USD.

• Overall: 1.9% GDP holds, but downside risks; allocate 50% stocks (VOO), 30% bonds, 20% gold.

Pro Tip: With China's slump, diversify to U.S. Tech (QQQ); hedge tariffs with VIX calls.

5. Next Week's Economy Watchlist (September 23-29, 2025)

• September 23: Fed minutes; cut pace insights.

• September 24: ISM Manufacturing PMI; global slowdown gauge.

• September 25: Consumer Confidence; sentiment on jobs/inflation.

• September 26: Core PCE inflation; Fed's key metric.

• Ongoing: China stimulus announcements; U.S.-China trade talks.

Stay Updated: Bookmark this page for next week's update. Follow Reuters, CNBC, and S&P Global for real-time alerts. Pennington Capital is your partner in economic news—empowering informed decisions.

Disclaimer: This update is for educational purposes only, not financial advice. Past performance does not guarantee future results. Consult a qualified financial professional for personalized guidance.