The October 2025 Wall Street Journal Economic Forecast Survey

The October 2025 Wall Street Journal Economic Forecast Survey was published on October 12, 2025. The headline is “Stronger Growth, Weaker Hiring: Forecasters See a Split-Screen Economy.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the forecasts section.

An excerpt:

Economists expect the Federal Reserve to lower interest rates at a slightly faster pace than they did in July. They now see two more quarter-percentage-point cuts from the current 4% to 4.25% range. That tracks the projections of Fed policymakers, who cut rates a quarter point last month and penciled in two more rate cuts this year amid concerns about the abrupt slowing in job growth.

Economists gave high marks to Fed Chair Jerome Powell, even as they predicted that the central bank’s independence is likely to diminish as Trump steps up his efforts to take control of interest rates and install loyalists on its policymaking committee.

Powell, whose term as chair ends May 15 next year, got an A or B from 77% of economists, compared with 80% a year ago.

As seen in the “Recession Probability” section, the average response as to whether the economy will be in a recession within the next 12 months was 33%. The individual estimates, of those who responded, ranged from 1% to 60%.  For reference, the average response in July’s survey [the previously published survey] was 33%.

As stated in the article, the survey’s 64 respondents were academic, financial and business economists.  The survey was conducted October 3 – October 9. Not every economist answered every question.

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Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2025:  1.66%

full-year 2026:  1.87%

full-year 2027:  2.05%

full-year 2028:  2.09%

Unemployment Rate:

December 2025: 4.45%

December 2026: 4.41%

December 2027: 4.22%

December 2028: 4.12%

10-Year Treasury Yield:

December 2025: 4.15%

December 2026: 4.12%

December 2027: 4.14%

December 2028: 4.13%

CPI:

December 2025:  3.05%

December 2026:  2.64%

December 2027:  2.36%

December 2028:  2.28%

Core PCE:

full-year 2025:  3.05%

full-year 2026:  2.60%

full-year 2027:  2.26%

full-year 2028:  2.15%

(note: I have highlighted this WSJ Economic Forecast survey each time it is published; it was published monthly until April 2021, after which the survey is conducted (at least) every three months; commentary on past surveys can be found under the “Economic Forecasts” label)

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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6659.09 as this post is written

Charts Indicating Economic Weakness – October 2025

Throughout this site there are many discussions of economic indicators.  This post is the latest in a series of posts indicating facets of U.S. economic weakness or a notably low growth rate.

The level and trend of economic growth is especially notable at this time. As seen in various sources, recession estimates have been at elevated levels.

As seen in the July 2025 Wall Street Journal Economic Forecast Survey the consensus (average estimate) among various economists is for 1.03% GDP in 2025, 1.87% GDP in 2026, and 2.04% GDP in 2027.

Charts Indicating U.S. Economic Weakness

Below is a small sampling of charts that depict weak growth or contraction, and a brief comment for each:

Job Openings (JTSJOL)

Job openings (Job Openings: Total Nonfarm [JTSJOL]), although still at a high level, have recently declined significantly. This “Job Openings” measure had a value of 7,227 (Thousands) through August 2025 as of the September 30, 2025 update, as shown below:

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -5.5%:

source: U.S. Bureau of Labor Statistics, Job Openings: Total Nonfarm [JTSJOL], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 7, 2025: https://fred.stlouisfed.org/series/JTSJOL

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Quits: Total Nonfarm (JTSQUR)

Quits (Quits: Total Nonfarm [JTSQUR]) have recently declined significantly. This measure had a value of 1.9 through August 2025 as of the September 30, 2025 update, as shown below:

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -5.0%:

source: U.S. Bureau of Labor Statistics, Job Openings: Total Nonfarm [JTSJOL], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 7, 2025: https://fred.stlouisfed.org/series/JTSJOL

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Total Transportation Services Index (TSITTL)

“Total Transportation Services Index” (TSITTL) is beginning to exhibit weakness as seen in the “Percent Change From Year Ago” basis. Shown below is this TSITTL measure with last value of 130.0 through June, last updated September 10, 2025:

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -1.1%:

source: U.S. Bureau of Transportation Statistics, Total Transportation Services Index [TSITTL], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 8, 2025; https://fred.stlouisfed.org/series/TSITTL

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Motor Vehicle Retail Sales: Heavy Weight Trucks (HTRUCKSSA)

Sales of “Heavy Weight Trucks” (HTRUCKSSA) has recently been declining. Shown below is this measure with last value of 33.309 Thousand through August 2025, last updated October 3, 2025:

Below is this measure displayed on a “Percent Change From Year Ago” basis with value -19.1%:

source: U.S. Bureau of Economic Analysis, Motor Vehicle Retail Sales: Heavy Weight Trucks [HTRUCKSSA], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed October 9, 2025: https://fred.stlouisfed.org/series/HTRUCKSSA

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Other Indicators

As mentioned previously, many other indicators discussed on this site indicate weak economic growth or economic contraction, if not outright (gravely) problematical economic conditions.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6735.11 as this post is written

Building Financial Danger – October 8, 2025 Update

My overall analysis indicates a continuing elevated and growing level of financial danger which contains many worldwide and U.S.-specific “stresses” of a very complex nature. I have written numerous posts on this site concerning both ongoing and recent “negative developments.”  These developments, as well as other exceedingly problematical conditions, have presented a highly perilous economic environment that endangers the overall financial system.

Also of ongoing immense importance is the existence of various immensely large asset bubbles, a subject of which I have extensively written.  While all of these asset bubbles are wildly pernicious and will have profound adverse future implications, hazards presented by the bond market bubble are especially notable.

Predicting the specific timing and extent of a stock market crash is always difficult, and the immense complexity of today’s economic situation makes such a prediction even more challenging. With that being said, my analyses continue to indicate that a near-term exceedingly large (from an ultra long-term perspective) stock market crash – that would also involve (as seen in 2008) various other markets – will occur. [note: the “next crash” and its aftermath has paramount significance and implications, as discussed in the post of January 6, 2012 titled “The Next Crash And Its Significance“ and various subsequent posts in the “Economic Depression” label]

As reference, below is a daily chart since 2008 of the S&P500 (through October 7, 2025 with a last price of 6714.59), depicted on a LOG scale, indicating both the 50dma and 200dma as well as price labels:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6714.59 as this post is written

Recession Probability Models – October 2025

There are a variety of economic models that are supposed to predict the probabilities of recession.

While I don’t agree with the methodologies employed or probabilities of impending economic weakness as depicted by the following two models, I think the results of these models should be monitored.

Please note that each of these models is updated regularly, and the results of these – as well as other recession models – can fluctuate significantly.

The first is the “Yield Curve as a Leading Indicator” from the New York Federal Reserve.  I wrote a post concerning this measure on March 1, 2010, titled “The Yield Curve as a Leading Indicator.”

Currently (last updated October 4, 2025 using data through September 2025) this “Yield Curve” model shows a 27.4167% probability of a recession in the United States twelve months ahead.  For comparison purposes, it showed a 28.8466% probability through August 2025, and a chart going back to 1960 is seen at the “Probability Of U.S. Recession Predicted by Treasury Spread.” (pdf)

The second model is from Marcelle Chauvet and Jeremy Piger.  This model is described on the St. Louis Federal Reserve site (FRED) as follows:

Smoothed recession probabilities for the United States are obtained from a dynamic-factor markov-switching model applied to four monthly coincident variables: non-farm payroll employment, the index of industrial production, real personal income excluding transfer payments, and real manufacturing and trade sales. This model was originally developed in Chauvet, M., “An Economic Characterization of Business Cycle Dynamics with Factor Structure and Regime Switching,” International Economic Review, 1998, 39, 969-996. (http://faculty.ucr.edu/~chauvet/ier.pdf)

Additional details and explanations can be seen on the “U.S. Recession Probabilities” page.

This model, last updated on October 1, 2025 currently shows a .96% probability using data through August 2025.

Here is the FRED chart:

Data Source:  Piger, Jeremy Max and Chauvet, Marcelle, Smoothed U.S. Recession Probabilities [RECPROUSM156N], retrieved from FRED, Federal Reserve Bank of St. Louis, accessed October 7, 2025:  http://research.stlouisfed.org/fred2/series/RECPROUSM156N

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The two models featured above can be compared against measures seen in recent posts.  For instance, as seen in the July 13, 2025 post titled “The July 2025 Wall Street Journal Economic Forecast Survey“ economists surveyed averaged a 33% probability of a U.S. recession within the next 12 months.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6714.59 as this post is written

The Stock Market Bubble – October 2025 Update

This post is a brief update to various past commentaries concerning the stock market bubble, most notably the February 2020 page titled “The Immense Stock Market Bubble And Characteristics.”

The stock market bubble continues to grow in size, which is highly notable given the enormous size of the bubble during February 2020. My analyses indicate that this stock market bubble is the largest stock market bubble ever in the United States. As well, another problematic aspect is that the stock market bubble is just one of many exceedingly large asset bubbles in existence. The existence of these astoundingly large asset bubbles poses a grave risk to the financial system and economy.

I have written extensively concerning the stock market bubble, its causes, and current and future consequences. It should be noted that a fully comprehensive discussion would be exceedingly lengthy and at times very complex. Perhaps the paramount aspects of this stock market bubble is that, for various reasons, it is far larger than most conventional measures would suggest; and that the future consequences of the “bursting” of the bubble will be highly problematical on many fronts.

As stated in the February 2020 commentary, one of the foremost signs of asset bubbles is excessive sentiment. Excessive sentiment can manifest in many ways. The current stock market environment exhibits a broad array of excessively positive sentiment. This excessively positive sentiment is often referred to as excessive speculation or “froth.” The stock market is experiencing an epochal speculative mania.

There are many different measures that portray the (vastly) oversized nature of the bubble from a valuation perspective. Here is a chart showing the “Market Cap/GVA” as seen in the September 2025 Hussman market commentary (further explained on that site):

In the February 2020 commentary I displayed a variety of long-term charts that depicted notable fundamental and technical measures. Below is an update to three of those charts, the S&P500, the XLK ETF, and the Nasdaq 100.

Shown below is the S&P500 daily chart since 1990, with prices displayed on a linear scale on the top plot and a LOG scale on the bottom plot:

(click on charts to enlarge images)(charts courtesy of StockCharts.com; chart creation and annotation by the author)

Here is the XLK (technology) ETF since the year 2000, shown on a linear price scale (top plot) and a LOG scale (bottom plot):

(click on chart to enlarge image)(charts courtesy of StockCharts.com; chart creation and annotation by the author)

From a technical analysis perspective, many indicators show highly unique readings. Among these are the Bollinger Bands seen in the Nasdaq 100 chart, demonstrating the outsized velocity of recent price increases. As seen in the monthly chart below, the price has strongly rebounded since mid-2022 and is once again at the upper Bollinger Band:

(click on chart to enlarge image)(charts courtesy of StockCharts.com; chart creation and annotation by the author)

Another indication of a highly elevated level of froth is the extreme excessive valuations and accompanying very rapid price advance of scores of individual stocks both in technology as well as other sectors.

As I have mentioned in previous commentaries, the “bursting” of this stock market bubble will have many adverse impacts. My analyses continue to indicate this popping of the bubble will occur during a crash.

As I have previously written, most recently in “The U.S. Economic Situation” updates:

My analyses continues to indicate that the growing level of financial danger will lead to the next stock market crash that will also involve (as seen in 2008) various other markets as well.  Key attributes of this next crash is its outsized magnitude (when viewed from an ultra-long term historical perspective) and the resulting economic impact.  This next financial crash is of tremendous concern, as my analyses indicate it will lead to a Super Depression – i.e. an economy characterized by deeply embedded, highly complex, and difficult-to-solve problems.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6715.79 as this post is written

VIX Charts Since The Year 2000 – October 1, 2025 Update

For reference purposes, below are two charts of the VIX from year 2000 through the October 1, 2025 close, which had a value of 16.29.

Here is the VIX Weekly chart, depicted on a LOG scale, with the 13- and 34-week moving averages, seen in the cyan and red lines, respectively:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

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Here is the VIX Monthly chart, depicted on a LOG scale, with the 13- and 34-month moving average, seen in the cyan and red lines, respectively:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6711.20 as this post is written

S&P500 Charts Since 2009 And 1980 – October 1, 2025 Update

In the March 9, 2012 post (“Charts of Equities’ Performance Since March 9, 2009 And January 1, 1980“) I highlighted two charts for reference purposes.

Below are those two charts, updated through the latest daily closing price.

The first is a daily chart of the S&P500 (shown in green), as well as five prominent (AAPL, IBM, AMZN, SBUX, CAT) individual stocks, since 2005. There is a blue vertical line that is very close to the March 6, 2009 low. As one can see, both the S&P500 performance, as well as many stocks including the five shown, have performed strongly since the March 6, 2009 low:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

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This next chart shows, on a monthly LOG basis, the S&P500 since 1980.  I find this chart notable as it provides an interesting long-term perspective on the S&P500′s performance.  The 20, 50, and 200-month moving averages are shown in blue, red, and green lines, respectively:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 6711.20 as this post is written