#Economy & #Stocks Review - Economic Deterioration Is Everywhere

E&S Review

Much of today's economic data, including officially collected and produced time series, is highly unreliable. Statisticians use well-documented techniques such as geometric smoothing, seasonal adjustments, substitution, double counting, and hedonic adjustments to modify economic outcomes dating back to the 1980s. Politicians and central bankers often leverage these techniques for political gain.

Data manipulated by these statistical methods are frequently revised without clear notification to the public, especially when administrations or public policies change.

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Economic Deterioration Regardless Is Everywhere

U.S. service-sector activity expanded in October, according to the latest ISM® Services PMI® Report. The index rose to 52.4%, up from 50% in September, marking the eighth month of expansion in 2025. Business activity and new orders both rebounded, with readings of 54.3% and 56.2%, respectively, while employment contracted for the fifth consecutive month at 48.2%.

Supplier deliveries slowed slightly (50.8%), and prices continued to rise, reaching 70%, the highest level since 2022. Inventories remained slightly in contraction at 49.5%, and order backlogs fell sharply to 40.8%, the lowest since 2009.

Overall, 11 industries reported growth, one more than in September. ISM Chair Steve Miller noted that while October’s rebound in business activity and new orders is encouraging, the ongoing employment weakness and declining backlogs reflect caution about the economy’s durability amid tariff pressures and concerns tied to the federal government shutdown.

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