Offshore
EndGame Macro The Second Job Economy And Why Working More Still Isn’t Enough This chart tracks how many Americans are holding more than one job at the same time. Not overtime. Not side projects for fun. Literally stacking jobs to make the math work. For…
er of multiple jobholders surged 499,000 in October and November, to a record 9.3 million.
This figure has risen +3.9 million since the 2020 low.
This is also 1.2 million above the 2008 Financial Crisis peak.
As a % of total employment, multiple jobholders rose to 5.8%, nearly matching the 2 previous highs seen over the last 25 years.
At the same time, Americans working primary full-time and secondary part-time jobs jumped to 5.3 million, the 2nd-highest in history.
As a % of employment, this metric now stands at 3.4%, the 2nd-highest since 2000.
The cost of living crisis is real. - The Kobeissi Letter tweet
This figure has risen +3.9 million since the 2020 low.
This is also 1.2 million above the 2008 Financial Crisis peak.
As a % of total employment, multiple jobholders rose to 5.8%, nearly matching the 2 previous highs seen over the last 25 years.
At the same time, Americans working primary full-time and secondary part-time jobs jumped to 5.3 million, the 2nd-highest in history.
As a % of employment, this metric now stands at 3.4%, the 2nd-highest since 2000.
The cost of living crisis is real. - The Kobeissi Letter tweet
Offshore
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EndGame Macro
Why the Labor Market Feels Worse Than the Data
This chart is one of the more honest signals we have about the labor market. It shows the share of the labor force that’s working full time. Not just employed, not gigging, not patching hours but full time.
As of November, that number is about 78.2%. A year or two ago, it was north of 80%. That drop may look small, but historically it’s meaningful. This series tends to roll over before layoffs show up cleanly in the headline unemployment rate.
Why? Because companies almost always adjust hours and status first. They freeze hiring. They shift people to part time. They cut back schedules. Only later do they cut jobs outright. So when this line starts drifting down, it’s telling you stress is already working its way through the system.
At the same time, the unemployment rate has crept up from roughly 4.1% to 4.6% over the past year. That doesn’t sound dramatic, but in a labor force this big it represents hundreds of thousands more people out of work. More important, it confirms the direction of travel: things are cooling, not tightening.
Now here’s where it gets interesting. Compare this to my previous post on multiple jobholders, which is sitting near record highs at around 9 million people, roughly 5.4% of the workforce.
Those two charts together tell a very specific story…
• Full time work is getting harder to secure or sustain.
• More people are taking second jobs anyway.
That combination doesn’t show up in a single headline statistic, but it shows up in real life fast.
What’s Actually Happening On The Ground
Employers are managing costs by trimming hours and leaning on part time roles. Workers are responding by stacking income wherever they can. The labor market is still working, but the quality of work is deteriorating.
That’s why the vibe feels worse than the data suggests. People aren’t just worried about losing jobs, they’re worried about whether one job is enough anymore. And for a growing share of households, it isn’t.
My View
This doesn’t look like 2008 yet where unemployment exploded all at once. But it does look like the phase before that, where pressure quietly builds.
When the full time share slips, unemployment ticks higher, and multiple jobholding spikes at the same time, you’re looking at a job quality recession. It’s subtle. It doesn’t ring alarm bells on cable TV. But it shows up in credit stress, burnout, and consumer pullbacks.
If this trend continues, layoffs usually follow not because companies want to cut, but because demand eventually forces their hand. This chart isn’t predicting disaster. It’s telling you the labor market is bending. And historically, when it bends long enough, something eventually gives.
tweet
Why the Labor Market Feels Worse Than the Data
This chart is one of the more honest signals we have about the labor market. It shows the share of the labor force that’s working full time. Not just employed, not gigging, not patching hours but full time.
As of November, that number is about 78.2%. A year or two ago, it was north of 80%. That drop may look small, but historically it’s meaningful. This series tends to roll over before layoffs show up cleanly in the headline unemployment rate.
Why? Because companies almost always adjust hours and status first. They freeze hiring. They shift people to part time. They cut back schedules. Only later do they cut jobs outright. So when this line starts drifting down, it’s telling you stress is already working its way through the system.
At the same time, the unemployment rate has crept up from roughly 4.1% to 4.6% over the past year. That doesn’t sound dramatic, but in a labor force this big it represents hundreds of thousands more people out of work. More important, it confirms the direction of travel: things are cooling, not tightening.
Now here’s where it gets interesting. Compare this to my previous post on multiple jobholders, which is sitting near record highs at around 9 million people, roughly 5.4% of the workforce.
Those two charts together tell a very specific story…
• Full time work is getting harder to secure or sustain.
• More people are taking second jobs anyway.
That combination doesn’t show up in a single headline statistic, but it shows up in real life fast.
What’s Actually Happening On The Ground
Employers are managing costs by trimming hours and leaning on part time roles. Workers are responding by stacking income wherever they can. The labor market is still working, but the quality of work is deteriorating.
That’s why the vibe feels worse than the data suggests. People aren’t just worried about losing jobs, they’re worried about whether one job is enough anymore. And for a growing share of households, it isn’t.
My View
This doesn’t look like 2008 yet where unemployment exploded all at once. But it does look like the phase before that, where pressure quietly builds.
When the full time share slips, unemployment ticks higher, and multiple jobholding spikes at the same time, you’re looking at a job quality recession. It’s subtle. It doesn’t ring alarm bells on cable TV. But it shows up in credit stress, burnout, and consumer pullbacks.
If this trend continues, layoffs usually follow not because companies want to cut, but because demand eventually forces their hand. This chart isn’t predicting disaster. It’s telling you the labor market is bending. And historically, when it bends long enough, something eventually gives.
Full-time employment is falling at an alarming pace:
The US economy lost -983,000 full-time jobs in October and November, bringing the total down to 134.2 million, the lowest since December 2021.
As a result, just 78.2% of the labor force is now employed full-time, the lowest since June 2021.
This percentage has now declined -2.5 points since the June 2023 peak.
In the past, such a trend has usually been seen during recessions.
By comparison, full-time employment as % of the labor force fell -2.2 percentage points during the 2001 recession.
Meanwhile, part-time jobs jumped +1 million in October and November, to a record 29.5 million.
The labor market needs more rate cuts. tweet
Offshore
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EndGame Macro
The Longest Warning in History And Why the Yield Curve Still Matters
This chart is putting two things on top of each other with the 10 year minus 3 month Treasury yield spread in blue, and the number of unemployed people in red, going all the way back to 1990. The idea is simple. When short term rates rise above long term rates and when the curve inverts the bond market is saying policy is tight enough to slow growth. Historically, that’s been a reliable early warning that unemployment will eventually rise.
What’s unusual this time isn’t the signal. It’s the delay.
We’ve had an inversion that started in mid 2022 and dragged on for more than two years, roughly 780+ days, the longest stretch on record. And yet unemployment hasn’t exploded. It’s drifted up, sitting around 7.8 million people, or roughly 4.6%, but nothing like the sharp spikes people remember from past downturns. That gap between the warning and the pain is what the chart is highlighting.
Why History Still Matters Here
If you look back, this lag is stretched but it’s not unprecedented in spirit.
In 1929, the curve inverted and the economy cracked fast. Unemployment went from under 5% to over 25% in just a couple of years. The lag was short because leverage and confidence collapsed all at once.
In 2006–07, the curve inverted for about 10 months. The economy looked fine for a while. Then housing rolled over, credit froze, and unemployment surged 18–24 months later into the financial crisis.
Even in the late 1970s, the inversion lasted a long time, over 600 days before the early 80s double dip recession crushed manufacturing and sent unemployment sharply higher.
The common thread isn’t timing precision. It’s behavior. Tight money doesn’t break things immediately. It changes decisions first where banks lend less, businesses delay, households stretch and only later does that show up in job losses.
Why This Cycle Feels Different But Isn’t Immune
This time, the lag has been stretched by real shock absorbers. Pandemic stimulus kept demand alive. Households locked in low mortgage rates. Companies hoarded labor because hiring was so hard after COVID. Fiscal deficits stayed large. A lot of debt was refinanced before rates jumped.
All of that slowed the transmission. It didn’t cancel it.
That’s why the curve can un invert even steepen a bit while the labor market is still quietly weakening. Full time work is slipping. Multiple jobholding is near record highs. Credit stress is building. Commercial real estate is under pressure. These are the early echoes you usually hear before unemployment accelerates.
My Take Heading Into 2026
To me, this chart is saying the correlation still holds it’s just been delayed. The yield curve warned early, policy stayed tight longer, and the economy absorbed more than usual before cracking.
What I see happening is a grind. Unemployment drifting higher, maybe toward 5–5.5%. Growth slowing below trend and the Fed cutting rates more than people expected.
The danger is false comfort. Long lags make people think the signal failed. History says the opposite that the longer the lag, the more confidence builds and the sharper the adjustment once it finally shows up.
This doesn’t scream panic now. But it does say the bill hasn’t been paid yet. And going into 2026, the odds are rising that it finally comes due…unevenly, quietly, and hardest for the people least able to absorb it.
tweet
The Longest Warning in History And Why the Yield Curve Still Matters
This chart is putting two things on top of each other with the 10 year minus 3 month Treasury yield spread in blue, and the number of unemployed people in red, going all the way back to 1990. The idea is simple. When short term rates rise above long term rates and when the curve inverts the bond market is saying policy is tight enough to slow growth. Historically, that’s been a reliable early warning that unemployment will eventually rise.
What’s unusual this time isn’t the signal. It’s the delay.
We’ve had an inversion that started in mid 2022 and dragged on for more than two years, roughly 780+ days, the longest stretch on record. And yet unemployment hasn’t exploded. It’s drifted up, sitting around 7.8 million people, or roughly 4.6%, but nothing like the sharp spikes people remember from past downturns. That gap between the warning and the pain is what the chart is highlighting.
Why History Still Matters Here
If you look back, this lag is stretched but it’s not unprecedented in spirit.
In 1929, the curve inverted and the economy cracked fast. Unemployment went from under 5% to over 25% in just a couple of years. The lag was short because leverage and confidence collapsed all at once.
In 2006–07, the curve inverted for about 10 months. The economy looked fine for a while. Then housing rolled over, credit froze, and unemployment surged 18–24 months later into the financial crisis.
Even in the late 1970s, the inversion lasted a long time, over 600 days before the early 80s double dip recession crushed manufacturing and sent unemployment sharply higher.
The common thread isn’t timing precision. It’s behavior. Tight money doesn’t break things immediately. It changes decisions first where banks lend less, businesses delay, households stretch and only later does that show up in job losses.
Why This Cycle Feels Different But Isn’t Immune
This time, the lag has been stretched by real shock absorbers. Pandemic stimulus kept demand alive. Households locked in low mortgage rates. Companies hoarded labor because hiring was so hard after COVID. Fiscal deficits stayed large. A lot of debt was refinanced before rates jumped.
All of that slowed the transmission. It didn’t cancel it.
That’s why the curve can un invert even steepen a bit while the labor market is still quietly weakening. Full time work is slipping. Multiple jobholding is near record highs. Credit stress is building. Commercial real estate is under pressure. These are the early echoes you usually hear before unemployment accelerates.
My Take Heading Into 2026
To me, this chart is saying the correlation still holds it’s just been delayed. The yield curve warned early, policy stayed tight longer, and the economy absorbed more than usual before cracking.
What I see happening is a grind. Unemployment drifting higher, maybe toward 5–5.5%. Growth slowing below trend and the Fed cutting rates more than people expected.
The danger is false comfort. Long lags make people think the signal failed. History says the opposite that the longer the lag, the more confidence builds and the sharper the adjustment once it finally shows up.
This doesn’t scream panic now. But it does say the bill hasn’t been paid yet. And going into 2026, the odds are rising that it finally comes due…unevenly, quietly, and hardest for the people least able to absorb it.
Longest lag in unemployment from rate hikes in US history (longer than 1929 and 07) but the correlation remains strong. https://t.co/vsHW96gxtQ tweet
Dimitry Nakhla | Babylon Capital®
10 Quality Stocks That Saw Meaningful Multiple Compression >10% YTD 💵
1. $SPGI 30x ➡️ 27x | -10%
2. $INTU 32x ➡️ 28x | -12%
3. $BKNG 24x ➡️ 21x | -13%
4. $MSCI 36x ➡️ 30x | -17%
5. $AMZN 38x ➡️ 31x | -18%
6. $NFLX 39x ➡️ 30x | -23%
7. $RACE 45x ➡️ 34x | -24%
8. $CPRT 35x ➡️ 23x | -34%
9. $FICO 67x ➡️ 43x | -36%
10. $NVO 23x ➡️ 14x | -39%
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10 Quality Stocks That Saw Meaningful Multiple Compression >10% YTD 💵
1. $SPGI 30x ➡️ 27x | -10%
2. $INTU 32x ➡️ 28x | -12%
3. $BKNG 24x ➡️ 21x | -13%
4. $MSCI 36x ➡️ 30x | -17%
5. $AMZN 38x ➡️ 31x | -18%
6. $NFLX 39x ➡️ 30x | -23%
7. $RACE 45x ➡️ 34x | -24%
8. $CPRT 35x ➡️ 23x | -34%
9. $FICO 67x ➡️ 43x | -36%
10. $NVO 23x ➡️ 14x | -39%
tweet
Offshore
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EndGame Macro
A Strong GDP Print That Deserves a Second Look
The headline sounds great where real GDP grew at a 4.3% annual rate in Q3 2025, up from 3.8% in Q2. In plain terms, that’s about 1.1% growth for the quarter, just expressed at an annualized pace.
But once you dig into what actually drove that number, it feels less like the economy is firing on all cylinders and more like the math lined up in a way that flatters the moment.
What’s Actually Driving The 4.3%
The BEA is pretty explicit about the mix…
• Consumers carried the load. Consumer spending added about +2.39 percentage points to GDP.
• Trade did a lot of the work. Net exports added +1.59 points, more than a third of the entire print.
• Government helped. Government spending added about +0.39 points, with defense a key contributor.
• Investment barely mattered. Gross private domestic investment contributed roughly -0.02 points, essentially flat.
So growth was strong, but not broad. It was consumption plus a big trade swing plus government, with private investment largely absent.
Why GDP Can Look Better Than It Feels
This is where the report gets quietly revealing.
First, falling imports boost GDP even when that’s not healthy. Imports are subtracted in the GDP formula. So when imports fell (-4.7%), GDP automatically looked stronger. Sometimes that means more domestic production. But often it means cooling demand, inventory drawdowns, or households trading down. GDP treats all of that as a positive either way.
Second, government spending counts the same as private demand. Government spending rose (+2.2%), lifting GDP. But that doesn’t tell you whether the private economy is getting healthier, or whether we’re leaning harder on the public balance sheet to keep growth afloat.
Third, income is telling a softer story than output. This is the biggest tell…
•Real GDP: +4.3%
•Real GDI: +2.4%
•Average of GDP and GDI: +3.4%
When GDP runs almost 2 points hotter than GDI, it’s a sign output looks stronger than incomes can really support. The statistical discrepancy hit 1.2% of GDP, which is basically the data saying these stories don’t fully line up. That 3.4% average is often a more honest read than the 4.3% headline.
Fourth, consumers are spending but incomes aren’t rising. Yes, consumer spending here is inflation adjusted. Real PCE rose +3.5%. But real disposable personal income was flat (0.0%). That gap gets filled by lower saving, more credit, or pulling spending forward. Sure enough, the saving rate fell to 4.2%, down from 5.0% in Q2. That’s not collapse but it is less cushion.
Where The Weakness Is Hiding
Look at the interest sensitive parts…
•Residential investment: -5.1%
•Structures (commercial investment): -6.3%
That’s the economy’s future capacity moving backward. Housing and commercial structures are classic late cycle casualties of high rates. On top of that, private inventory investment declined, dragging on overall investment.
This Wasn’t Fully Non Inflationary Growth
• Gross domestic purchases price index: +3.4%
• PCE price index: +2.8%
• Core PCE: +2.9%
All of these accelerated versus Q2. Part of why nominal GDP looks so strong (current dollar GDP +8.2%) is simply that prices are still rising fast enough to pad the numbers.
My View
This report doesn’t read like all clear. It reads like late cycle resilience the kind that can look fine until it doesn’t.
• The consumer is still spending, but with flat real income and lower saving.
• Investment, especially housing and structures, isn’t confirming the optimism.
• The GDP–GDI gap says the strength isn’t fully backed by incomes.
• And data delays tied to the government shutdown raise the odds of revisions later.
So if someone wants to victory lap 4.3% GDP, the pushback is show me the same strength in private investment, in real incomes, and in a narrowing GDP-GDI gap. That’s when growth is real and durable. tweet
A Strong GDP Print That Deserves a Second Look
The headline sounds great where real GDP grew at a 4.3% annual rate in Q3 2025, up from 3.8% in Q2. In plain terms, that’s about 1.1% growth for the quarter, just expressed at an annualized pace.
But once you dig into what actually drove that number, it feels less like the economy is firing on all cylinders and more like the math lined up in a way that flatters the moment.
What’s Actually Driving The 4.3%
The BEA is pretty explicit about the mix…
• Consumers carried the load. Consumer spending added about +2.39 percentage points to GDP.
• Trade did a lot of the work. Net exports added +1.59 points, more than a third of the entire print.
• Government helped. Government spending added about +0.39 points, with defense a key contributor.
• Investment barely mattered. Gross private domestic investment contributed roughly -0.02 points, essentially flat.
So growth was strong, but not broad. It was consumption plus a big trade swing plus government, with private investment largely absent.
Why GDP Can Look Better Than It Feels
This is where the report gets quietly revealing.
First, falling imports boost GDP even when that’s not healthy. Imports are subtracted in the GDP formula. So when imports fell (-4.7%), GDP automatically looked stronger. Sometimes that means more domestic production. But often it means cooling demand, inventory drawdowns, or households trading down. GDP treats all of that as a positive either way.
Second, government spending counts the same as private demand. Government spending rose (+2.2%), lifting GDP. But that doesn’t tell you whether the private economy is getting healthier, or whether we’re leaning harder on the public balance sheet to keep growth afloat.
Third, income is telling a softer story than output. This is the biggest tell…
•Real GDP: +4.3%
•Real GDI: +2.4%
•Average of GDP and GDI: +3.4%
When GDP runs almost 2 points hotter than GDI, it’s a sign output looks stronger than incomes can really support. The statistical discrepancy hit 1.2% of GDP, which is basically the data saying these stories don’t fully line up. That 3.4% average is often a more honest read than the 4.3% headline.
Fourth, consumers are spending but incomes aren’t rising. Yes, consumer spending here is inflation adjusted. Real PCE rose +3.5%. But real disposable personal income was flat (0.0%). That gap gets filled by lower saving, more credit, or pulling spending forward. Sure enough, the saving rate fell to 4.2%, down from 5.0% in Q2. That’s not collapse but it is less cushion.
Where The Weakness Is Hiding
Look at the interest sensitive parts…
•Residential investment: -5.1%
•Structures (commercial investment): -6.3%
That’s the economy’s future capacity moving backward. Housing and commercial structures are classic late cycle casualties of high rates. On top of that, private inventory investment declined, dragging on overall investment.
This Wasn’t Fully Non Inflationary Growth
• Gross domestic purchases price index: +3.4%
• PCE price index: +2.8%
• Core PCE: +2.9%
All of these accelerated versus Q2. Part of why nominal GDP looks so strong (current dollar GDP +8.2%) is simply that prices are still rising fast enough to pad the numbers.
My View
This report doesn’t read like all clear. It reads like late cycle resilience the kind that can look fine until it doesn’t.
• The consumer is still spending, but with flat real income and lower saving.
• Investment, especially housing and structures, isn’t confirming the optimism.
• The GDP–GDI gap says the strength isn’t fully backed by incomes.
• And data delays tied to the government shutdown raise the odds of revisions later.
So if someone wants to victory lap 4.3% GDP, the pushback is show me the same strength in private investment, in real incomes, and in a narrowing GDP-GDI gap. That’s when growth is real and durable. tweet
Offshore
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EndGame Macro
A Strong GDP Print That Deserves a Second Look
The headline sounds great where real GDP grew at a 4.3% annual rate in Q3 2025, up from 3.8% in Q2. In plain terms, that’s about 1.1% growth for the quarter, just expressed at an annualized pace.
But once you dig into what actually drove that number, it feels less like the economy is firing on all cylinders and more like the math lined up in a way that flatters the moment.
What’s Actually Driving The 4.3%
The BEA is pretty explicit about the mix…
• Consumers carried the load. Consumer spending added about +2.39 percentage points to GDP.
• Trade did a lot of the work. Net exports added +1.59 points, more than a third of the entire print.
• Government helped. Government spending added about +0.39 points, with defense a key contributor.
• Investment barely mattered. Gross private domestic investment contributed roughly -0.02 points, essentially flat.
So growth was strong, but not broad. It was consumption plus a big trade swing plus government, with private investment largely absent.
Why GDP Can Look Better Than It Feels
This is where the report gets quietly revealing.
First, falling imports boost GDP even when that’s not healthy. Imports are subtracted in the GDP formula. So when imports fell (-4.7%), GDP automatically looked stronger. Sometimes that means more domestic production. But often it means cooling demand, inventory drawdowns, or households trading down. GDP treats all of that as a positive either way.
Second, government spending counts the same as private demand. Government spending rose (+2.2%), lifting GDP. But that doesn’t tell you whether the private economy is getting healthier, or whether we’re leaning harder on the public balance sheet to keep growth afloat.
Third, income is telling a softer story than output. This is the biggest tell…
•Real GDP: +4.3%
•Real GDI: +2.4%
•Average of GDP and GDI: +3.4%
When GDP runs almost 2 points hotter than GDI, it’s a sign output looks stronger than incomes can really support. The statistical discrepancy hit 1.2% of GDP, which is basically the data saying these stories don’t fully line up. That 3.4% average is often a more honest read than the 4.3% headline.
Fourth, consumers are spending but incomes aren’t rising. Yes, consumer spending here is inflation adjusted. Real PCE rose +3.5%. But real disposable personal income was flat (0.0%). That gap gets filled by lower saving, more credit, or pulling spending forward. Sure enough, the saving rate fell to 4.2%, down from 5.0% in Q2. That’s not collapse but it is less cushion.
Where The Weakness Is Hiding
Look at the interest sensitive parts…
•Residential investment: -5.1%
•Structures (commercial investment): -6.3%
That’s the economy’s future capacity moving backward. Housing and commercial structures are classic late cycle casualties of high rates. On top of that, private inventory investment declined, dragging on overall investment.
This wasn’t clean, non inflationary growth…
• Gross domestic purchases price index: +3.4%
• PCE price index: +2.8%
• Core PCE: +2.9%
All of these accelerated versus Q2. Part of why nominal GDP looks so strong (current dollar GDP +8.2%) is simply that prices are still rising fast enough to pad the numbers.
My View
This report doesn’t read like all clear. It reads like late cycle resilience the kind that can look fine until it doesn’t.
• The consumer is still spending, but with flat real income and lower saving.
• Investment, especially housing and structures, isn’t confirming the optimism.
• The GDP–GDI gap says the strength isn’t fully backed by incomes.
• And data delays tied to the government shutdown raise the odds of revisions later.
So if someone wants to victory lap 4.3% GDP, the pushback is show me the same strength in private investment, in real incomes, and in a narrowing GDP-GDI gap. That’s when growth is real and durable. tweet
A Strong GDP Print That Deserves a Second Look
The headline sounds great where real GDP grew at a 4.3% annual rate in Q3 2025, up from 3.8% in Q2. In plain terms, that’s about 1.1% growth for the quarter, just expressed at an annualized pace.
But once you dig into what actually drove that number, it feels less like the economy is firing on all cylinders and more like the math lined up in a way that flatters the moment.
What’s Actually Driving The 4.3%
The BEA is pretty explicit about the mix…
• Consumers carried the load. Consumer spending added about +2.39 percentage points to GDP.
• Trade did a lot of the work. Net exports added +1.59 points, more than a third of the entire print.
• Government helped. Government spending added about +0.39 points, with defense a key contributor.
• Investment barely mattered. Gross private domestic investment contributed roughly -0.02 points, essentially flat.
So growth was strong, but not broad. It was consumption plus a big trade swing plus government, with private investment largely absent.
Why GDP Can Look Better Than It Feels
This is where the report gets quietly revealing.
First, falling imports boost GDP even when that’s not healthy. Imports are subtracted in the GDP formula. So when imports fell (-4.7%), GDP automatically looked stronger. Sometimes that means more domestic production. But often it means cooling demand, inventory drawdowns, or households trading down. GDP treats all of that as a positive either way.
Second, government spending counts the same as private demand. Government spending rose (+2.2%), lifting GDP. But that doesn’t tell you whether the private economy is getting healthier, or whether we’re leaning harder on the public balance sheet to keep growth afloat.
Third, income is telling a softer story than output. This is the biggest tell…
•Real GDP: +4.3%
•Real GDI: +2.4%
•Average of GDP and GDI: +3.4%
When GDP runs almost 2 points hotter than GDI, it’s a sign output looks stronger than incomes can really support. The statistical discrepancy hit 1.2% of GDP, which is basically the data saying these stories don’t fully line up. That 3.4% average is often a more honest read than the 4.3% headline.
Fourth, consumers are spending but incomes aren’t rising. Yes, consumer spending here is inflation adjusted. Real PCE rose +3.5%. But real disposable personal income was flat (0.0%). That gap gets filled by lower saving, more credit, or pulling spending forward. Sure enough, the saving rate fell to 4.2%, down from 5.0% in Q2. That’s not collapse but it is less cushion.
Where The Weakness Is Hiding
Look at the interest sensitive parts…
•Residential investment: -5.1%
•Structures (commercial investment): -6.3%
That’s the economy’s future capacity moving backward. Housing and commercial structures are classic late cycle casualties of high rates. On top of that, private inventory investment declined, dragging on overall investment.
This wasn’t clean, non inflationary growth…
• Gross domestic purchases price index: +3.4%
• PCE price index: +2.8%
• Core PCE: +2.9%
All of these accelerated versus Q2. Part of why nominal GDP looks so strong (current dollar GDP +8.2%) is simply that prices are still rising fast enough to pad the numbers.
My View
This report doesn’t read like all clear. It reads like late cycle resilience the kind that can look fine until it doesn’t.
• The consumer is still spending, but with flat real income and lower saving.
• Investment, especially housing and structures, isn’t confirming the optimism.
• The GDP–GDI gap says the strength isn’t fully backed by incomes.
• And data delays tied to the government shutdown raise the odds of revisions later.
So if someone wants to victory lap 4.3% GDP, the pushback is show me the same strength in private investment, in real incomes, and in a narrowing GDP-GDI gap. That’s when growth is real and durable. tweet
Offshore
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Wasteland Capital
Q3 GDP +4.3%. Wow. Absolutely nuts.
Roaring consumer spend. Imports weak, exports up (tariff effect). Investment still weak (due to high uncertainty). Government spend recovery.
Now imagine the upcoming AI investment acceleration on top… https://t.co/CLYgwUfkuL
tweet
Q3 GDP +4.3%. Wow. Absolutely nuts.
Roaring consumer spend. Imports weak, exports up (tariff effect). Investment still weak (due to high uncertainty). Government spend recovery.
Now imagine the upcoming AI investment acceleration on top… https://t.co/CLYgwUfkuL
tweet
Offshore
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EndGame Macro
Personal Income & Outlays And How Health Care Spending Is Masking Consumer Weakness
If you step back from the headlines and just follow the money, this report tells a pretty clear story. The consumer is still spending, but the way they’re doing it matters, and that’s where the stress starts to show.
The core question isn’t is spending up?
It’s whether income growth is strong enough to support that spending without eating into the buffer.
Right now, the answer is no.
Income Is Rising But Buying Power Is Not
On paper, September looks fine…
• Personal income: up 0.4%
• Disposable personal income: up 0.3%
But once you strip out inflation, the picture softens fast…
• Real disposable income: up just 0.1%
• Real income per person: basically flat month to month
So incomes are growing in name, but what households can actually feel hasn’t changed much at all. That’s usually the first crack.
Spending Is Still Rising And Savings Are Filling The Gap
Spending didn’t slow in September…
• Personal consumption: up 0.4%
• Total outlays: also up 0.4%
But that spending outpaced income again. The way it balanced wasn’t higher pay, it was lower saving…
• Personal saving rate: down to 4.0%
• That’s steadily lower than earlier this year, when it was closer to 5.5%
This isn’t a one month quirk. It’s a trend. Households are keeping things going by giving up cushion, not because their income picture is improving.
Health Care Is Quietly Doing A Lot Of The Work
Here’s a piece that often gets overlooked.
Health care including health insurance and medical services now makes up roughly 17% of all consumer spending. And it’s one of the areas still growing.
That matters because…
• Health spending is mostly non discretionary. People don’t choose more medical bills the way they choose a vacation.
• A large share is paid by employers or the government, but it still shows up as consumer spending in the data.
• Insurance is measured as a service, which can rise even as households feel squeezed by premiums and out of pocket costs.
So consumer spending can look strong even when households themselves feel worse off. A lot of this growth is people paying unavoidable bills, not leaning into new demand.
Are People Buying More, Or Just Paying More?
The real versusbnominal split answers that…
• Nominal spending: up 0.4%
• Prices: up 0.3%
• Real spending: only +0.1%
And the mix is telling…
• Goods: down 0.3%
• Durables: down 0.4%
• Nondurables: down 0.3%
• Services: up 0.3%
People are pulling back on things and still paying for services, especially the ones they can’t avoid. That’s a very familiar late cycle pattern.
The Weak Spots Are Showing
A few areas stand out as pressure points…
• Big ticket items are rolling over. Cars, appliances, and other durables are slipping first, which is typical when rates stay high.
• Interest costs are creeping up. Personal interest payments rose again, quietly eating into cash flow.
• Spending is running ahead of income over the year.
• Real income: up about 1.5% year over year
• Real spending: up about 2.4%
That gap doesn’t close on its own. It gets closed by lower savings or more debt and right now it’s savings doing the work.
What Stands Out Most
The big takeaway is this…
Consumer spending is being propped up by momentum and mandatory expenses, not by rising real income or renewed confidence.
That doesn’t mean recession has arrived. But it does mean the system is getting tighter. Goods are weakening. Savings are thinning. Services especially health care are carrying more of the load.
My View
September shows an economy that’s still moving forward, but increasingly on inertia rather than fresh strength. Historically, that’s not where expansions end but it is where they start to lose their balance.
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Personal Income & Outlays And How Health Care Spending Is Masking Consumer Weakness
If you step back from the headlines and just follow the money, this report tells a pretty clear story. The consumer is still spending, but the way they’re doing it matters, and that’s where the stress starts to show.
The core question isn’t is spending up?
It’s whether income growth is strong enough to support that spending without eating into the buffer.
Right now, the answer is no.
Income Is Rising But Buying Power Is Not
On paper, September looks fine…
• Personal income: up 0.4%
• Disposable personal income: up 0.3%
But once you strip out inflation, the picture softens fast…
• Real disposable income: up just 0.1%
• Real income per person: basically flat month to month
So incomes are growing in name, but what households can actually feel hasn’t changed much at all. That’s usually the first crack.
Spending Is Still Rising And Savings Are Filling The Gap
Spending didn’t slow in September…
• Personal consumption: up 0.4%
• Total outlays: also up 0.4%
But that spending outpaced income again. The way it balanced wasn’t higher pay, it was lower saving…
• Personal saving rate: down to 4.0%
• That’s steadily lower than earlier this year, when it was closer to 5.5%
This isn’t a one month quirk. It’s a trend. Households are keeping things going by giving up cushion, not because their income picture is improving.
Health Care Is Quietly Doing A Lot Of The Work
Here’s a piece that often gets overlooked.
Health care including health insurance and medical services now makes up roughly 17% of all consumer spending. And it’s one of the areas still growing.
That matters because…
• Health spending is mostly non discretionary. People don’t choose more medical bills the way they choose a vacation.
• A large share is paid by employers or the government, but it still shows up as consumer spending in the data.
• Insurance is measured as a service, which can rise even as households feel squeezed by premiums and out of pocket costs.
So consumer spending can look strong even when households themselves feel worse off. A lot of this growth is people paying unavoidable bills, not leaning into new demand.
Are People Buying More, Or Just Paying More?
The real versusbnominal split answers that…
• Nominal spending: up 0.4%
• Prices: up 0.3%
• Real spending: only +0.1%
And the mix is telling…
• Goods: down 0.3%
• Durables: down 0.4%
• Nondurables: down 0.3%
• Services: up 0.3%
People are pulling back on things and still paying for services, especially the ones they can’t avoid. That’s a very familiar late cycle pattern.
The Weak Spots Are Showing
A few areas stand out as pressure points…
• Big ticket items are rolling over. Cars, appliances, and other durables are slipping first, which is typical when rates stay high.
• Interest costs are creeping up. Personal interest payments rose again, quietly eating into cash flow.
• Spending is running ahead of income over the year.
• Real income: up about 1.5% year over year
• Real spending: up about 2.4%
That gap doesn’t close on its own. It gets closed by lower savings or more debt and right now it’s savings doing the work.
What Stands Out Most
The big takeaway is this…
Consumer spending is being propped up by momentum and mandatory expenses, not by rising real income or renewed confidence.
That doesn’t mean recession has arrived. But it does mean the system is getting tighter. Goods are weakening. Savings are thinning. Services especially health care are carrying more of the load.
My View
September shows an economy that’s still moving forward, but increasingly on inertia rather than fresh strength. Historically, that’s not where expansions end but it is where they start to lose their balance.
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Offshore
Photo
The Few Bets That Matter
$PATH trades below 4.5x forward sales with a clear ARR and RPO acceleration while Maestro is only starting to be deployed and management guided to continuous acceleration.
I'll take it and say thanks. https://t.co/rAQHalZEYw
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$PATH trades below 4.5x forward sales with a clear ARR and RPO acceleration while Maestro is only starting to be deployed and management guided to continuous acceleration.
I'll take it and say thanks. https://t.co/rAQHalZEYw
tweet
Offshore
Photo
The Few Bets That Matter
$PATH trades below 4.5x forward sales with ARR & RPO acceleration while Maestro is starting to be deployed and management guided to continuous acceleration. https://t.co/MYdHf3wXLm
tweet
$PATH trades below 4.5x forward sales with ARR & RPO acceleration while Maestro is starting to be deployed and management guided to continuous acceleration. https://t.co/MYdHf3wXLm
tweet