Monthly Economic Review — November 2025
Markets and economic data presented a mixed but cautiously optimistic outlook this November, as investors and policymakers navigated ongoing uncertainty around inflation, interest rates, and growth.
United States:
Economic Activity: US private-sector output reached a four-month high in November, driven largely by strength in services, according to the S&P Global Purchasing Managers' Index. The composite output index rose to 54.8, signaling continued expansion in both manufacturing and the wider services economy. However, growth in new manufacturing orders moderated, and finished goods inventories hit record highs, raising concerns about possible factory slowdowns in coming months.
Inflation and Monetary Policy: Input costs and selling prices rose at a faster pace in November, renewing inflationary worries. Markets responded by pricing in a strong probability (currently near 88%) of a 25-basis-point rate cut from the Federal Reserve at its December meeting, though Fed officials remain divided. Incoming retail sales data was softer than expected, and labor market reports—especially from the ADP private payrolls survey—suggested a cooling in hiring.
Consumer and Business Outlook: Consumer sentiment measures slipped modestly, reflecting some caution as the holiday shopping season ramped up. That said, robust Black Friday and Cyber Monday sales data are being closely watched for clues on consumers’ willingness to spend amidst persistent inflation and high borrowing costs.
Labor Market: Job cut announcements fell in November compared to October but remain above year-ago levels, with technology and telecommunications sectors leading in planned layoffs.
International Highlights:
Europe: The Eurozone’s manufacturing sector contracted further in November, even as services held up. Retail sales were largely flat. The next European Central Bank meeting, closely watched for clues on policy direction, is scheduled for December 18.
United Kingdom: PMI data revealed stable manufacturing activity but a moderation in construction. Mortgage lending weakened, and UK retail sales growth slowed compared to previous months.
Canada: Canadian businesses reported a slightly improved, though still muted, outlook. The job market is expected to show only modest improvement in November; the unemployment rate may tick up to 7.0%. CIBC suggests this is unlikely to prompt an immediate rate cut by the Bank of Canada at its meeting on December 10.
Currency Markets:
The US dollar weakened against most major trading partners through November, with notable strength only against the Canadian dollar in early December. Movements in FX largely reflected shifting expectations on central bank policy and recent economic data.
Looking Ahead: The market’s focus will turn to upcoming central bank meetings and delayed employment data. The trajectory of inflation and policy moves from the Federal Reserve, European Central Bank, and Bank of England will remain crucial in shaping economic and market trends as 2025 draws to a close.
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