Buoyed by a surge in cloud revenue, the rapturous response to its latest Gemini chatbot and a push into making its own AI chips, Alphabet is challenging Nvidia's dominance as the world's valuable company. Shares in the Google parent have surged 35% since October, growing its market capitalization by nearly $1 trillion to $3.84 trillion as of Monday's close. That puts it within shouting distance of Nvidia's record $4.4 trillion valuation, while potentially reordering the top of a stock market dominated by the Magnificent Seven tech companies.
The U.S. government posted a higher $284 billion deficit for October in a report delayed and impacted by the recent federal government shutdown and reflecting record tariff revenues offset by a shift of some November benefit payments into last month's data, the Treasury Department said on Tuesday.
TARIFF REVENUES HIT RECORD MONTHLY HIGH
U.S. consumers were much less confident in the economy in November in the aftermath of the government shutdown, weak hiring and stubborn inflation.
The Conference Board said Tuesday that its consumer confidence index dropped to 88.7 in November from an upwardly revised October reading of 95.5, the lowest reading since April, when President Donald Trump announced sweeping tariffs that caused the stock market to plunge.
The figures suggest that Americans are increasingly wary of high costs and sluggish job gains, with perceptions of the labor market worsening, the survey found. Declining confidence could pose political problems for Trump and Republicans in Congress, as the dimmer views of the economy were seen among all political affiliations and were particularly sharp among independents, the Conference Board said.
Earlier Tuesday, a government report showed that retail sales slowed in September after healthy readings over the summer. While economists forecast healthy growth for the July-September quarter, many expect a much weaker showing in the final three months of the year, largely because of the shutdown.
Less-confident consumers may spend less, though the connection isn’t always clear. In recent years, consumer spending has held up even when the available data suggests they’ve grown more anxious.
“We do not think that consumer spending is about to hit a cliff, as spending has decoupled from confidence, but risks to the downside are increasing,” Thomas Simons, chief U.S. economist at Jefferies, an investment bank, said.
The proportion of consumers that said jobs are “plentiful” dropped to 27.6% in November, down from 28.6% in the previous month. It is down sharply from 37% in December.
At the same time, 17.9% said jobs are “hard to get,” slightly below the 18.3% who said so in October. That figure is up from 15.2% in September. The figures on job availability are seen by economists as reliable predictors of hiring and the unemployment rate.
Americans continue to worry about elevated costs, fueling the “affordability” concerns that were a key issue in elections earlier this month.
“Consumers’ write-in responses pertaining to factors affecting the economy continued to be led by references to prices and inflation, tariffs and trade, and politics, with increased mentions of the federal government shutdown,” said Dana Peterson, chief economist at the Conference Board. The shutdown ended Nov. 12.
The economy likely grew at a solid annual rate of about 3% in the July-September quarter, economists estimate. But growth is likely to slow in the final three months of the year, largely because of the shutdown, which cut off pay for federal workers, disrupted contracts, and interrupted air travel.
The Conference Board survey ran through Nov. 18, about five days after the shutdown ended.
The computer-and-printer giant HP plans to slash thousands of workers from its ranks over the next few years, the company announced on Tuesday.
Palo Alto-headquartered HP included the announcement in its earnings report from the most recent quarter, writing that it expects to reduce its global headcount by around 4,000 to 6,000 employees by the end of its 2028 fiscal year. Given that a 2024 filing put HP’s headcount at 58,000, these cuts would amount to about 7% to 10% of its workforce.
The plan, HP wrote, is intended “to drive customer satisfaction, product innovation, and productivity through artificial intelligence adoption and enablement.” It expects to spend about $650 million on the restructuring — signaling that it intends to employ layoffs and severance payments, rather than attrition — but save $1 billion a year in the long run.
During his call with analysts on Tuesday, HP CEO Enrique Lores said of the cuts, “These are some of the most difficult decisions we need to make, and we are committed to treating our colleagues with care and respect.”
Lores later faced a question about the cuts and responded by repeatedly hyping up the promise of AI. He said the company had been running test pilots with AI over the past two years and realized that some processes in the company can be redesigned to better take advantage of the nascent tech.
He’s far from the first executive to hype up AI while shrinking parts of their company. Salesforce’s Marc Benioff touted his cutbacks to the software-maker’s support staff in September amid its rollout of bot agents; last year, CEOs at Dropbox and Google cut workers amid blitzes of spending meant to take advantage of the tech. Microsoft, a key HP partner, slashed staff earlier this year after CEO Satya Nadella touted how much of the company’s code was now being written by AI.
Lores, in his comments at the end of the analysts call, said, “We have a significant opportunity to embed AI in everything we do and transform the company.”
HP made a similar job-cut announcement in late 2022, amid a wave of other huge layoffs at tech companies. The plan, then, was also to cut 4,000 to 6,000 employees over a three-year span, but HP later tacked on additional cuts.
The company did not immediately respond to SFGATE’s request for comment on Tuesday.
Sales at U.S. retailers and restaurants increased modestly in September as resilient consumers moderated their spending after splurging over the summer.
Sales rose 0.2% in September from the previous month, the Commerce Department said Tuesday, in a report delayed more than a month because of the government shutdown. Sales jumped 0.6% in July and August and 1% in June. Numerous reports on inflation, employment, spending, and growth remain delayed and the government won’t likely be caught up until late December.
The retail sales figures, which aren’t adjusted for inflation, suggest that Americans pulled back on spending in September as many households struggled with high prices for groceries, rent, and many imported goods hit by tariffs. The retail sales report covers about one-third of consumer spending, with the rest going to services such as travel, haircuts, and entertainment. Still, higher spending should lift the economy’s growth to a solid 3% annual rate in the July-September quarter, economists forecast, after a sluggish 1.6% expansion in the first half of the year.
Much of the spending, however, was driven by rising prices at gas stations and grocery stores. Still, sales rose 0.7% in September at restaurants and bars, a healthy gain in discretionary spending. Sales at clothing, electronics, and sporting goods stores fell.
Consumer spending could slow in the final three months of the year, economists warned. The government shutdown, weak hiring, and elevated inflation will likely cause more Americans to cut back.
“The moribund labor market and ongoing drag on real incomes from tariff-induced price increases suggest that this slowdown is likely to be maintained,” Oliver Allen, an economist at Panthenon Macroeconomics, a consulting firm, said.
Also on Tuesday, payroll processor ADP released its weekly measure of hiring, which found that companies cut an average of 13,500 jobs a week in the four weeks ending Nov. 8. The report is a sign hiring may have slowed since September, when the government said a solid 119,000 jobs were added.
The disparity found in economic data shows how the economy remains in an uncertain state despite the solid growth in the third quarter. Hiring has generally been weak and the unemployment rate has ticked higher, which could drag down consumer spending and the broader economy if it worsens. Unemployment rose to 4.4% in September, the highest in nearly four years, from 4.3%, according to the delayed monthly jobs report released last week.
Higher-income Americans are driving much of the gains, according to data from Bank of America and reports from retailers such as Walmart, as lower-income shoppers seek bargains and are more likely to spend more on necessities.
Still, some retailers issued positive reports Tuesday, including electronics chair Best Buy and Dick’s Sporting Goods. Best Buy lifted its sales and profit forecasts for the year.
Tuesday’s report comes before the crucial winter holiday season kicks off this weekend, when retailers earn as much as a fifth of their revenues. The National Retail Federation and other forecasters expect modest sales gains this year, compared with last year’s holiday, with the NRF projecting that sales will top $1 trillion for the first time.
Separate figures from the Labor Department suggest that inflation remains elevated but isn’t accelerating, which could make it more likely that a closely-divided Federal Reserve cuts rates next month.
Wholesale prices rose 0.3% in September from August, the Labor Department said Tuesday, and 2.7% compared with a year ago. The monthly gain in the producer price index was pushed higher by a sharp increase in gasoline costs. The yearly figure was unchanged from the previous month.
Core prices, which exclude the volatile food and energy prices, rose just 0.1% in September and 2.6% from a year earlier. Those figures are less than expected and suggest inflation pressures are cooling, economists said.
The retail sales figures land as many economic data are coming in mixed. Wage growth has slowed this year and is just modestly above inflation, a trend that is likely driving Americans’ concerns around affordability.
Wages, on average, rose 3.8% in September from a year ago, the government said last week. That is only modestly above September’s annual inflation rate of 3%.
But for many Americans, particularly those earning lower incomes or for older workers, wages are rising more slowly and are clearly trailing inflation.
The Bank of America Institute estimates that for the poorest one-third of households, pay grew just 1% in October from a year earlier, while the highest one-third saw their wages rise 3.7%. The gap between higher- and lower-income households matches an August figure as the widest in nearly a decade, the bank said. Bank of America uses anonymous data from its customers to calculate the figures.
And a separate report from JPMorganChase Institute showed that incomes for a typical household have retreated to levels last seen in the early 2010s, after the harsh 2008-2009 recession.
“Households are going into the end of the year with weak income growth and bank balances that remain flat, after adjusting for inflation,” the report said.
The shortlist for the next Federal Reserve chair appears to be getting much shorter. Kevin Hassett, director of the National Economic Council, is in the lead to succeed Jerome Powell when his term at the central bank ends in May, Bloomberg reports, citing anonymous sources. On Tuesday, Treasury Secretary Scott Bessent told CNBC that there's a "very good chance" that President Donald Trump will name a new Fed chair by Christmas.
The U.S. government has negotiated Medicare price cuts for 15 widely prescribed drugs — including a 71% discount on Novo Nordisk's Ozempic and Wegovy — beginning in 2027. The reductions are expected to save Medicare $12 billion. However, the impact on drugmakers' revenue is likely to be "muted," according to The Wall Street Journal, because Medicare plans already get undisclosed discounts and rebates on the drugs' list prices. Other medications with newly negotiated prices include Pfizer's Ibrance for breast cancer.
Dick's Sporting Goods will shutter an undisclosed number of Foot Locker stores to keep the recently acquired retailer from becoming a further drag on profits. Dick's raised its outlook while reporting third-quarter earnings on Tuesday, but investors reacted warily to the Foot Locker integration. Sales at existing Dick's stores were robust and are expected to grow by as much as 4% through January. Foot Locker was a different story, with closures, the elimination of excess inventory and other merger expenses expected to cost $500 million to $750 million.
Americans may feel grim about the economy, but they're still shopping: A record 186.9 million are expected to turn out for Black Friday weekend, per the National Retail Federation. In November and December, retail sales are expected to grow 3.7% to 4.2% — slower than last year, though still topping $1 trillion. But because many retailers started offering promotions early, "there are no assurances the same deals will be offered again on the real Black Friday or that popular items will still be in stock," says one industry expert.
Real income growth is lagging, and household cash liquidity hasn't rebounded to pre-pandemic trends.
Our latest JPMorganChase Institute brief, drawing on de-identified data from millions of households, reveals how persistent inflation and a softer labor market are reshaping financial health as we close out 2025.
What’s new?
— Real income growth for prime-age workers (aged 25-54) remains historically low: Stuck at 1.8% in October—matching the weakest stretch since the early 2010s, despite a much lower unemployment rate today.
— Older worker income is starting to slow earlier: About half of those aged 50–54 are seeing their purchasing power fall, a potentially worrying sign for near-retirees.
— Income growth for young workers continues to underperform: Early-career income growth is well below historic norms, reflecting fewer job transitions and slower hiring.
— Bank balances stabilize, but lag behind pre-pandemic trends: Median balances are up 23% vs. 2019 but have been flat since early 2024 and remain below where they’d be if pre-pandemic trends had continued.
— Low-income household balances rebound: Bank balances for low-income households returned to positive growth in 2025, while high-income households’ balances continue to slip as more cash moves into investment accounts.
But there’s more:
— Stock market gains are uneven: While some households can tap into strong market returns, most gains are concentrated among higher-income groups.
— Cash management is shifting while total cash reserves rise: More households are moving funds out of checking and savings and into higher-yield investments, changing the landscape for liquidity and risk. At the same time, when investment accounts are included, total liquid assets are rising across all income groups.
Why it matters:
Consumers are heading into the holidays with tighter budgets and less financial cushion, making them more sensitive to shocks. Policymakers, lenders, and servicers should watch for increased vulnerability, especially among older and younger workers, and adapt strategies to support financial stability as household cash management evolves.
Abercrombie & Fitch on Tuesday reported nearly 7% growth in quarterly sales, exceeding analysts’ expectations, as the retailer raised its full-year outlook for sales and earnings. While the company’s namesake brand saw a 2% quarterly sales decline, Hollister again picked up the slack, with a sales increase of 16%. Strong back-to-school and fall seasons boosted sales, CEO Fran Horowitz said, adding that profit faced pressures, including tech investments and new U.S. tariffs. Meanwhile, federal data out Tuesday shows that overall U.S. retail sales slowed in September.