From the Association of American Railroads (AAR) AAR Data Center. Graph and excerpts reprinted with permission.

Continued Economic Uncertainty Reflected in Rail Volumes
...
In November 2025, total U.S. rail carloads were up 1.5% over November 2024, and 9 of the 20 major rail carload categories posted year-over-year gains. ...

U.S. rail intermodal shipments, which are driven primarily by consumer goods, fell 6.5% in November 2025 from November 2024. Year-to-date intermodal volume through November was 13.00 million containers and trailers, up 1.9% (nearly 247,000 units) over last year.
emphasis added

The AAR Freight Rail Index (FRI) combines seasonally adjusted month-to-month rail intermodal shipments with carloads excluding coal and grain. The index is a useful gauge of underlying freight demand associated with the industrial and consumer economy. The index fell 0.4% in November 2025 from October 2025, its seventh decline in the past eight months. The index is 4.4% below its year-earlier level, largely because of the intermodal slowdown in recent months.

The advance release of Q3 GDP has been cancelled. Q3 GDP will be released on Dec 23rd.

From BofA:

Since our last weekly publication, 3Q GDP tracking increased from 2.8% q/q sarr to 3.0% The upward revision was largely due to the strong September durable goods report that led us to revise higher our equipment estimate. [December 5th estimate]
emphasis added

From Goldman:

We lowered our Q3 GDP tracking estimate by 0.3pp to +3.5% (quarter-over-quarter annualized) and our Q3 domestic final sales estimate by 0.2pp to +2.6%. [December 5th estimate]

And from the Atlanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2025 is 3.5 percent on December 5, down from 3.8 percent on December 4. After this morning’s personal income and outlays release from the US Bureau of Economic Analysis, the nowcast for third-quarter real personal consumption expenditures growth declined from 3.1 percent to 2.7 percent. [December 5th estimate]

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through September 2025.

CPI Shelter was up 3.6% year-over-year in September, down slightly from 3.6% in August, and down from the cycle peak of 8.2% in March 2023.
Housing (PCE) was up 3.7% YoY in September, down from 3.9% in August and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will slowly continue to decline over the next year as rents for existing tenants continue to increase.
The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 3 months (annualized):

Key measures are above the Fed's target on a 3-month basis. 

3-month annualized change:
PCE Price Index: 2.8%
Core PCE Prices: 2.7%
Core minus Housing: 2.6%

From the BEA: Personal Income and Outlays, September 2025

Personal income increased $94.5 billion (0.4 percent at a monthly rate) in September, according to estimates released today by the U.S. Bureau of Economic Analysis. Disposable personal income (DPI)—personal income less personal current taxes—increased $75.9 billion (0.3 percent) and personal consumption expenditures (PCE) increased $65.1 billion (0.3 percent).

Personal outlays—the sum of PCE, personal interest payments, and personal current transfer payments—increased $70.7 billion in September. Personal saving was $1.09 trillion in September and the personal saving rate—personal saving as a percentage of disposable personal income—was 4.7 percent.
...
From the preceding month, the PCE price index for September increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

From the same month one year ago, the PCE price index for September increased 2.8 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago.
emphasis added

The September PCE price index increased 2.8 percent year-over-year (YoY), up from 2.7 percent YoY in August.
The PCE price index, excluding food and energy, increased 2.8 percent YoY, down from 2.9 percent in August.

The following graph shows real Personal Consumption Expenditures (PCE) through August 2025 (2017 dollars). Note that the y-axis doesn't start at zero to better show the change.

Click on graph for larger image.

The dashed red lines are the quarterly levels for real PCE.

Personal income was at expectations and spending was below expectations.
Inflation was slightly lower than expected.

From Manheim Consulting today: Manheim Used Vehicle Value Index: November 2025 Trends

The Manheim Used Vehicle Value Index (MUVVI) rose to 205.4, reflecting a 1.3% increase in November’s wholesale used-vehicle prices (adjusted for mix, mileage, and seasonality) compared to October. The index is mostly unchanged compared to November 2024. The long-term average monthly move for November is a decrease of 0.6%.
emphasis added

Click on graph for larger image.

This index from Manheim Consulting is based on all completed sales transactions at Manheim’s U.S. auctions.

The Manheim index suggests used car prices increased in November (seasonally adjusted) and were mostly unchanged YoY.

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Thursday:
• At 10:00 AM ET, Personal Income and Outlays for September. The consensus is for a 0.4% increase in personal income, and for a 0.4% increase in personal spending. And for the Core PCE price index to increase 0.2% (up 2.9% YoY).

• Also at 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for December).

Hotel occupancy was weak over the summer months, due to less international tourism.  The fall months are mostly domestic travel and occupancy is still under pressure! 

From STR: U.S. hotel results for week ending 29 November

The U.S. hotel industry reported mixed year-over-year comparisons, according to CoStar’s latest data through 29 November. ...

23-29 November 2025 (percentage change from comparable week in 2024):

• Occupancy: 49.8% (-1.0%)
• Average daily rate (ADR): US$141.31 (+0.2%)
• Revenue per available room (RevPAR): US$70.42 (-0.7%)
emphasis added

The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.
Click on graph for larger image.

The red line is for 2025, blue is the median, and dashed light blue is for 2024.  Dashed black is for 2018, the record year for hotel occupancy. 
The 4-week average of the occupancy rate is tracking behind both last year and the median rate for the period 2000 through 2024 (Blue).
Note: Y-axis doesn't start at zero to better show the seasonal change.
The 4-week average will decrease seasonally until early next year.
On a year-to-date basis, the only worse years for occupancy over the last 25 years were pandemic or recession years.

From Cotality (formerly CoreLogic): US home price insights — December 2025

• Year-over-year price growth continues its downward trend, only rising 1.1% in October 2025.

• Price declines expanded from six of the 100 largest metros in January to 32 by October, marking the broadest softening of prices since the early 2010s.
...
This year began with a stable growth trajectory, with national price growth posting an annual increase of 3.4% in January. However, that momentum slowed steadily as the year progressed. By October, annual appreciation was a mere 1.1% annual increase—the lowest rate since early 2012.

"The housing market in 2025 demonstrated remarkable resilience despite significant headwinds. Slowing price growth reflects a much-needed rebalancing after years of unsustainable gains. While some markets are experiencing declines, these adjustments will help restore affordability over time and make housing more accessible to a wider group of buyers,” said Cotality’s Chief Economist Dr. Selma Hepp.

This deceleration highlights the impact of higher mortgage rates earlier in the year and persistent affordability challenges. Furthermore, price growth was dampened by a notable increase in inventory. Many markets saw a surge in both existing and newly built homes, slowing rates of in-migration and weakened demand.

The robust price increases of 2022 when top metros — primarily in Florida and the Southeast — saw gains exceeding 30% has now given way to declines. At the start of 2025, only six metros — primarily in Florida — posted year-over-year drops. By October, that number surged to 32, as pricing downturns extended into Texas, California, and various states throughout the Mountain West.
emphasis added

This graph from Cotality shows the Top 10 coolest markets.
The list is dominated by Florida and Texas. According to Cotality, the highest risk markets are all in Florida.
House prices are under pressure with more inventory and sluggish sales.

Today, in the Calculated Risk Real Estate Newsletter: Q3 Update: Delinquencies, Foreclosures and REO

A brief excerpt:

Even with the recent weakness in house prices, it is important to note that there will NOT be a surge in foreclosures that could lead to cascading house price declines (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes.

With substantial equity, and low mortgage rates (mostly at a fixed rates), few homeowners will have financial difficulties.

But it is still important to track delinquencies and foreclosures.
...
This graph shows the nominal dollar value of Residential REO for FDIC insured institutions based on the Q3 FDIC Quarterly Banking Profile released in late November. Note: The FDIC reports the dollar value and not the total number of REOs.

The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosure houses) was up 24% YOY from $765 million in Q3 2024 to $951 million in Q3 2025. This is still historically very low, but increasing.

There is much more in the article.

The DOL reported:

In the week ending November 29, the advance figure for seasonally adjusted initial claims was 191,000, a decrease of 27,000 from the previous week's revised level. This is the lowest level for initial claims since September 24, 2022 when it was 189,000. The previous week's level was revised up by 2,000 from 216,000 to 218,000. The 4-week moving average was 214,750, a decrease of 9,500 from the previous week's revised average. The previous week's average was revised up by 500 from 223,750 to 224,250.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 214,750.

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released.  The consensus is for 218,000, up from 216,000 last week.

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the November 2025 seasonally adjusted annual sales rate (SAAR) of 367 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 367 thousand SAAR in November, up from 339 thousand in October, and down 25.2% from 491 thousand SAAR in November 2024.
Year-to-date (NSA) sales are down 13.2% in 2025 compared to 2024 through November.
Usually, heavy truck sales decline sharply prior to a recession, and sales have collapsed recently.  

The BEA reported that light vehicle sales were at 15.6 million in November on a seasonally adjusted annual basis (SAAR). This was up 2.0% from the sales rate in October, and down 5.6% from November 2024.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through October (red from Omdia).
Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".
Then sales were depressed in May and June. 
Sales were boosted in August and September due to the termination of the EV credit at the end of September.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in November were slightly above the consensus forecast of 15.4 million SAAR.

Today, in the Real Estate Newsletter: Asking Rents Soft Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.

More recently, immigration policy has become a negative for rentals.

Apartment List: Asking Rent Growth -1.1% Year-over-year ...

The national median rent fell 1.0% in November, and now stands at $1,367. This was the fourth consecutive month-over-month decline, as we’re now in the midst of the rental market’s off-season. It’s likely that we will close out the year with an additional modest rent decline in December.

Realtor.com: 27th Consecutive Month with Year-over-year Decline in Rents

October 2025 marks the 27th straight month of year-over-year rent decline for 0-2 bedroom properties since trend data began in 2020. Asking rents dipped by $29, or -1.7%, year over year.

There is much more in the article.

(Posted with permission). The ISM® Services index was at 52.6%, up from 52.4% the previous month. The employment index increased to 48.9%, up from 48.2%. Note: Above 50 indicates expansion, below 50 in contraction.

From the Institute for Supply Management: Services PMI® at 52.6% November 2025 ISM® Services PMI® Report

Economic activity in the services sector continued to expand in November, say the nation’s purchasing and supply executives in the latest ISM® Services PMI® Report. The Services PMI® registered at 52.6 percent and is in expansion territory for the ninth time in 2025.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In November, the Services PMI® registered a reading of 52.6 percent, 0.2 percentage point higher than the October figure of 52.4 percent. The Business Activity Index continued in expansion territory in November, registering 54.5 percent, 0.2 percentage point higher than the reading of 54.3 percent recorded in October. The New Orders Index also remained in expansion in November, with a reading of 52.9 percent, 3.3 percentage points below October’s figure of 56.2 percent but 0.9 percentage point above its 12-month average of 51.7 percent. The Employment Index contracted for the sixth month in a row with a reading of 48.9 percent, a 0.7-percentage point improvement from the 48.2 percent recorded in October — the fourth consecutive monthly increase since a reading of 46.4 percent in July.

“The Supplier Deliveries Index registered 54.1 percent, 3.3 percentage points higher than the 50.8 percent recorded in October and 2.2 percentage points above its 12-month average of 51.9 percent. This is the 12th consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM® PMI® Reports index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

“The Prices Index registered 65.4 percent in November, its lowest reading since hitting 65.1 percent in April 2025. The November figure was a 4.6-percentage point drop from October’s reading of 70 percent. The index has exceeded 60 percent for 12 straight months.
emphasis added

Employment was in contraction for the 6th consecutive month, and prices paid remained high.

From the Fed: Industrial Production and Capacity Utilization

Industrial production (IP) increased 0.1 percent in September after moving down 0.3 percent in August; for the third quarter as a whole, IP increased at an annual rate of 1.1 percent. In September, the indexes for manufacturing and for mining were unchanged relative to August, and the output of utilities moved up 1.1 percent. At 101.4 percent of its 2017 average, total IP in September was 1.6 percent above its year-earlier level. Capacity utilization was unchanged relative to August at 75.9 percent, a rate that is 3.6 percentage points below its long-run (1972–2024) average.
emphasis added

Click on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and close to the level in February 2020 (pre-pandemic).

Capacity utilization at 75.9% is 3.6% below the average from 1972 to 2023.  This was below consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

The second graph shows industrial production since 1967.

Industrial production increased to 101.4. This is below the pre-pandemic level.

Industrial production was below consensus expectations (with revisions).

From ADP: ADP National Employment Report: Private Sector Employment Shed 32,000 Jobs in November; Annual Pay was Up 4.4%

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” said Dr. Nela Richardson, chief economist, ADP. “And while November's slowdown was broad-based, it was led by a pullback among small businesses.”
emphasis added

This was below the consensus forecast of 20,000 jobs added. The BLS report will NOT be released on Friday due to the government shutdown.

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 28, 2025. This week’s results include an adjustment for the Thanksgiving holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 33 percent compared with the previous week. The Refinance Index decreased 4 percent from the previous week and was 109 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 3 percent from one week earlier. The unadjusted Purchase Index decreased 32 percent compared with the previous week and was 17 percent higher than the same week one year ago.

“Mortgage rates moved lower in line with Treasury yields, which declined on data showing a weaker labor market and declining consumer confidence. The 30-year fixed mortgage rate declined to 6.32 percent after steadily increasing over the past month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “After adjusting for the impact of the Thanksgiving holiday, refinance activity decreased across both conventional and government loans, as borrowers held out for lower rates. Purchase applications were up slightly, but we continue to see mixed results each week as the broader economic outlook remains cloudy, even as cooling home-price growth and increasing for-sale inventory bring some buyers back into the market.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.32 percent from 6.40 percent, with points decreasing to 0.58 from 0.60 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 17% year-over-year unadjusted. 
Red is a four-week average (blue is weekly).  
Purchase application activity is still depressed, but solidly above the lows of 2023 and above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index increased from the bottom as mortgage rates declined, but is down from the recent peak in September.

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Wednesday:
• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:15 AM, The ADP Employment Report for November. This report is for private payrolls only (no government).  The consensus is for 20,000 jobs added, down from 42,000 in October.

• At 9:15 AM, The Fed will release Industrial Production and Capacity Utilization for October. The consensus is for no change in Industrial Production, and for Capacity Utilization to decrease to 77.3%.

• At 10:00 AM, the ISM Services Index for November.  The consensus is for 52.1, down from 52.4.

It was almost thirteen years ago when I wrote "The Future's so Bright …" I noted that I was the most optimistic since the '90s, and that things would only get better.

I pointed out that housing starts would increase significantly over the next several years, that state and local governments would start hiring again, that the budget deficit would decline sharply, and that household deleveraging was nearing and an end.

As I noted in January 2013: "There are several tailwinds for the economy, and the headwinds (like household deleveraging) are mostly subsiding."

Now these tailwinds have subsided. The significant growth for housing starts, new home sales and vehicle sales, is behind us.

With the exception of data centers, commercial real estate is struggling, and some sectors - like hotels - are in recession.  The Architecture Billings Index (ABI) has been in contraction for 35 of the last 37 months, suggesting a slowdown in CRE investment well into 2026.
And the Federal budget deficit is increasing sharply.

Fortunately the unemployment rate is still historically fairly low (but increasing), and household debt service and financial obligation ratios are low. 

I was also positive on demographics too, but unfortunately with less immigration and more prime age deaths, the demographic outlook isn't as favorable as a several years ago.

And we haven't addressed some of the longer term challenges I mentioned thirteen years ago:

There are a number of longer term challenges from rising health care expenditures, climate change, income and wealth inequality and more, but I remain very optimistic about the longer term too. There is a constant focus on the aging population, but by 2020, eight of the top ten largest cohorts (five year age groups) will be under 40, and by 2030 the top 11 cohorts are the youngest 11 cohorts. The renewing of America! And these young people are smart (less exposure to lead is a significant story), and well educated too.

Note: Here is an update on demographics through 2024.
Unfortunately recent policy choices have made the long term challenges more difficult.  But I'm still optimistic that those issues will be addressed.

I'm not currently predicting a recession (although I'm watching), and I expect further growth in 2026, but the near term future isn't as bright now.