The United States economy is showing fresh signs of weakness ahead of a crucial Federal Reserve meeting this week, with consumer confidence, job growth, and inflation concerns all weighing heavily on market sentiment.
Latest data from the University of Michigan revealed that consumer sentiment fell to 55.4 in September, the lowest since May, down from 58.2 in August. Households cited concerns about worsening business conditions, a fragile labor market, and rising costs fueled by tariffs. The International Monetary Fund also warned that Washington’s trade policies could worsen inflationary pressures.
Adding to the concerns, the U.S. Labor Department revised its employment figures, showing that the economy created about 911,000 fewer jobs in the year through March 2025 than previously estimated. The biggest downward revisions were seen in leisure, hospitality and retail, sectors that had earlier shown signs of strong recovery.
Despite these challenges, Wall Street remains cautiously optimistic. The Nasdaq hit a record high last week, driven by gains in technology stocks, as investors expect the Fed to deliver at least a 25 basis point rate cut. However, the central bank faces political headwinds, with President Donald Trump’s attempt to remove Fed Governor Lisa Cook sparking legal disputes and raising questions about the Fed’s independence.