ORLANDO, Fla. – Despite the interest rate cut from the Federal Reserve in early September, concerns about the health of the U.S. economy continue to mount.
While some health-of-the-U.S.-financial-system red flags are familiar, like unemployment, consumer sentiment and corporate layoffs, others are coming from surprising sources. Together, they paint a picture of an economy starting to struggle to regain stable footing.
Let’s start with economic indicators you’re probably familiar with.
The latest national jobs report shows just 22,000 new positions were added last month. Economists say that’s only a fraction of what’s needed to keep the U.S. on solid ground, but even more concerning, the unemployment rate has now ticked up to 4.3%, the highest level since October 2021.
Layoffs are hitting multiple industries, from technology and retail to pharmaceuticals and financial services. That’s not good news, but here’s the real surprise: it’s the public sector that’s leading the way. Recent government layoffs have cut almost 300,000 jobs this year alone, the most of any segment.
Confidence among the average Joe is also taking a hit.
The University of Michigan’s Surveys of Consumers (a measurement of consumer confidence) dropped 5% last month, signaling Americans are increasingly uneasy about the future. If you’re uneasy about the future, you’re probably not rushing out to make that buy-it-now-pay-for-it-later-big-ticket-item.
That’s a problem.
And that cautiousness is trickling down to moderate discretionary spending (not just big ticket spending) and consumers worrying about essentials such as groceries and gas. Economists know that when consumers pull back, it can ripple through the broader economy, lowering growth even further.
And then there’s the lumber connection.
We started off by talking about the familiar economic indicators like job growth, unemployment, layoffs, and consumer confidence. But one of the more unusual warning signs that has caught the attention of economists is coming from the lumber market.
Yes, wood.
Lumber futures fell 18% in September, marking their lowest levels in four months and down about 25% from a three-year high in August.
Why does this matter? Lumber is a leading indicator for the housing and construction sector, a key driver of the economy. When prices fall sharply, it can signal slowing demand for new housing starts. One New York based retailer noted they can now get next-day deliveries from a distributor at a lower cost than bulk orders from lumber mills that usually take weeks to get in house.
Analysts believe speculators who stockpiled lumber in anticipation of tariffs may now be sitting on an oversupply while simultaneously some builders are delaying projects amid that same economic uncertainty that’s an underlying factor with shrinking consumer confidence.
In other words, fewer homes being built could mean fewer construction jobs, less demand for related goods, and broader economic cooling. Again, that’s also a problem.
So, what’s next?
The combination of rising unemployment, weakening consumer confidence, and sliding commodity prices (like lumber) has economists asking whether the U.S. is facing a short-term slowdown or a more prolonged economic slog.
And while the Fed’s recent rate cut was intended to spur growth, some experts counter that it will take more than monetary policy to reassure households and businesses.
Until hiring rebounds, confidence stabilizes, layoffs level off and businesses find a solid footing (such as the lumber glut flattening out and builders feeling comfortable again breaking ground on new homes), uncertainty is likely to remain the defining feature of the economy for at least a bit longer.
[WATCH BELOW: Do you really need that extra car rental insurance?]
https://www.clickorlando.com/news/local/2025/09/30/dollars-sense-signs-of-economic-unease/