US GDP Beats Forecasts as Soft ADP Hiring Clouds the Outlook

Trade Gap Narrows as Exports Pick Up The September goods and services deficit narrowed to $52.8 billion from $59.3 billion in August, with exports up 3.0% and imports up just 0.6%. Industrial supplies and materials led the export gain, helped by a strong jump in nonmonetary gold, while consumer goods exports got a decent lift from pharmaceuticals. Year-to-date the overall deficit is still wider than in 2024, but the three-month average gap has come in $14 billion from a year earlier. That improvement, even if partly noise, takes a bit of pressure off the dollar bears who have been leaning on external balance as a key argument.

Durable Goods Cool, But Core Demand Holds October durable goods orders fell 2.2% after two monthly gains, but the headline drop is all transportation. Ex-transport, orders are up 0.2%, and ex-defense they’re down 1.5%. That split matters. Weakness in big-ticket transport can skew the headline and exaggerate the downside story. Under the hood, core demand is still slightly positive, which suggests business spending isn’t falling apart, just losing some steam. Equity traders will probably treat this as a mild negative for heavy industry rather than a broad warning on all cyclicals.

ADP Shows Private Jobs Down — Small Firms Feel the Pain The ADP report shows private payrolls down 32,000 in November, with hiring “choppy” through the back half of 2025. Weakness is concentrated in manufacturing, professional and business services, information, and construction. The breakdown by firm size is telling: small businesses are cutting aggressively, while mid-sized and large companies are still adding staff. That kind of split usually signals that conditions are getting tighter at the margin — credit a little more expensive, demand a little less reliable — even if headline growth is still strong.

Bottom Line: Growth Still Firm, but Not a One-Way Bull Story