Weekly Economics Report - Nov 10, 2025
US Senate advances bill to end federal shutdown
By David Morgan and Nathan Layne
- Senate bill would fund government through January 2026
- Bill includes three appropriations measures
- Democrats had resisted funding measure without healthcare fixes
- Trump pushes for direct payments over ACA subsidies
- Adds details on next steps, Thune quote in paragraphs 10-12
WASHINGTON, Nov 9 (Reuters) - The U.S. Senate on Sunday moved forward on a measure aimed at reopening the federal government and ending a now 40-day shutdown that has sidelined federal workers, delayed food aid and snarled air travel.
In a procedural vote, senators advanced a House-passed bill that will be amended to fund the government until January 30 and include a package of three full-year appropriations bills.
If the Senate eventually passes the amended measure, it still must be approved by the House of Representatives and sent to President Donald Trump for his signature, a process that could take several days.
Under a deal struck with a handful of Democrats who rebuffed their party’s leadership, Republicans agreed to a vote in December on extending subsidies under the Affordable Care Act. The subsidies, which help lower-income Americans pay for private health insurance and are due to expire at the end of the year, have been a Democratic priority during the funding battle.
The vote to advance the bill passed by a 60-40 margin, the minimum needed to overcome a Senate filibuster. “It looks like we’re getting very close to the shutdown ending,” Trump told reporters at the White House prior to the vote.
The bill would prohibit federal agencies from firing employees until January 30, a win for federal worker unions and their allies. It would stall Trump’s campaign to downsize the federal workforce. Some 2.2 million civilians worked for the federal government at the start of Trump’s second term, according to federal records. At least 300,000 employees are expected to leave the government by the end of this year due to Trump’s downsizing effort.
It would also provide back pay for all federal employees, including members of the military, Border Patrol agents, and air-traffic controllers.
When the Senate reconvenes on Monday, Republican leaders will try to get a bipartisan agreement to circumvent Senate rules and move quickly to passage. Otherwise, the chamber would require much of the coming week to move through procedural actions before voting on final passage, possibly extending the shutdown into next weekend.
“It was a good vote tonight," Senate Majority Leader John Thune told reporters after the Senate adjourned on Sunday. "Hopefully, we'll get an opportunity tomorrow to set up the next votes. Of course, that's going to take some cooperation and consent."
Sunday's deal was brokered by Democratic Senators Maggie Hassan and Jeanne Shaheen, both from New Hampshire, and Senator Angus King, an independent from Maine, said a person familiar with the talks.
"For over a month, I’ve made clear that my priorities are to both reopen government and extend the ACA enhanced premium tax credits. This is our best path toward accomplishing both of these goals," Shaheen posted on X. Senate Minority Leader Chuck Schumer, the chamber's top Democrat, voted against the measure. Many Democrats on the Hill watched the deal unfold with displeasure. “Senator Schumer is no longer effective and should be replaced,” wrote U.S. Representative Ro Khanna on X. “If you can’t lead the fight to stop healthcare premiums from skyrocketing for Americans, what will you fight for?"
Sunday marked the 40th day of the shutdown, which has sidelined federal workers and affected food aid, parks and travel, while air traffic control staffing shortages threaten to derail travel during the busy Thanksgiving holiday season late this month. Senator Thom Tillis, a Republican from North Carolina, said the mounting effects of the shutdown pushed the chamber toward an agreement. "Temperatures cool, the atmospheric pressure increases outside and all of a sudden it looks like things will come together," Tillis told reporters.
Should the government remain closed for much longer, economic growth could turn negative in the fourth quarter, especially if air travel does not return to normal levels by Thanksgiving, White House economic adviser Kevin Hassett warned on the CBS "Face the Nation" show. Thanksgiving falls on November 27 this year.
The wrangling on Capitol Hill came as Trump on Sunday again pushed to replace subsidies for the Affordable Care Act's health insurance marketplaces with direct payments to individuals. The subsidies, which helped double ACA enrollment to 24 million since they were put in place in 2021, are at the heart of the shutdown. Republicans have maintained they are open to addressing the issue only after government funding is restored.
Trump took to his Truth Social platform on Sunday to blast the subsidies as a "windfall for Health Insurance Companies, and a DISASTER for the American people," while demanding the funds be sent directly to individuals to buy coverage on their own. "I stand ready to work with both Parties to solve this problem once the Government is open," Trump wrote.
Americans shopping for 2026 Obamacare health insurance plans are facing a more than doubling of monthly premiums on average, health experts estimate, with the pandemic-era subsidies due to expire at the end of the year. The ACA enrollment period, however, runs through January 15, which would allow time for a legislative effort to extend the credits for next year.
US container imports fall in October amid tariff driven caution
By Abhinav Parmar and Lisa Baertlein
- October's US container cargo imports dropped 7.5% y/y
- Imports from China improved 5.4% from September but down 16.3% y/y
- China's share of US imports may stabilize in the near term - Descartes
- Imports from India down 19% month-over-month
Nov 10 (Reuters) - U.S. imports of containerized goods fell 7.5% year-over-year in October, as shipments from China plunged 16.3% amid importer caution over President Donald Trump's evolving tariff policies, supply chain technology provider Descartes DSG.TO said on Monday.
U.S. seaports handled a total of 2.3 million twenty-foot equivalent units (TEUs) last month, down 0.1% from September and below the 2.4 million to 2.6 million TEU range that typically signals peak trade activity, marking only the second October in the past decade to record a month-over-month decline. As holiday merchandise reaches store shelves and inventories remain well stocked, the National Retail Federation and Hackett Associates expect U.S. imports to slow in November and December, likely dropping below the 2 million TEU mark.
The anticipated declines this year partly reflect a late 2024 import surge fueled by concerns over potential port strikes and tariff-related frontloading that brought forward shipments originally scheduled for later months. "Our trade outlook is for a small decline in imports this year compared with 2024 and a further, larger decline in the first quarter of 2026," Hackett Associates Founder Ben Hackett said.
Imports from China, one of the United States' top trading partners, rose 5.4% month-over-month to 803,901 TEUs, but saw broad year-over-year declines in its largest categories with imports of furniture and bedding down 13.6%, toys and sporting goods down 30.4% and electrical machinery down 17.2% compared to 2024.
"October's results reflect ongoing caution among importers, with broad-based year-over-year declines and limited month-over-month growth. With new U.S.–China trade terms now in place following recent negotiations, China's share of U.S. imports may stabilize in the near term," Descartes said.
A 20% "fentanyl tariff" on Chinese imports drops to 10% on November 10, while a planned increase in reciprocal tariffs has been postponed for a year.
Meanwhile, an existing 10% tariff under the International Emergency Economic Powers Act remains in place with the Supreme Court reviewing its legality.
U.S. import volumes from the 10 largest sources rose 1.3% month-over-month in October, driven by China's recovery but partly offset by declines across Asia, with imports from India, Thailand, and Vietnam falling 19%, 6%, and 4.8%, respectively, according to Descartes.
China’s
factory-gate deflation eases in October, consumer prices rise
By Kevin Yao and Yukun Zhang
- October consumer prices rise 0.2% from a year earlier
- Producer price index extends three-year drop but moderates
- Authorities step up efforts to rein in price wars
- Deflationary pressures easing, but not over yet, analyst says
BEIJING, Nov 9 (Reuters) - China's producer price deflation eased in October and consumer prices returned to positive territory, data showed on Sunday, as the government steps up efforts to curb over-capacity and cut-throat competition among firms.
Despite the improvement in headline numbers, analysts warn that deflationary pressures on the world's second-largest economy are not yet over, and the government may have to roll out additional policy measures to spur demand.
"Demand remains weak but a rebound in CPI indicates that supply-side policies are having an effect, and the supply-demand balance in many industries is improving," said Xu Tianchen, senior economist at the Economist Intelligence Unit. "The future trend of inflation will depend on how much demand-side policies are strengthened."
The producer price index fell 2.1% in October from a year earlier, National Bureau of Statistics (NBS) data showed, compared with an expected 2.2% decline in a Reuters poll of economists. The index has remained negative since October 2022 and dropped 2.3% in September. NBS statistician Dong Lijuan said capacity management in key industries has narrowed year-on-year producer price declines. In coal mining and washing, the price drop narrowed by 1.2 percentage points and price falls in photovoltaic equipment, battery, and automobile manufacturing narrowed by 1.4, 1.3, and 0.7 percentage points, respectively.
Consumer prices edged up 0.2% from a year earlier, reversing a two-month decline and beating the estimate for no change.
Against the previous month, CPI rose 0.2% in October after rising 0.1% in September and compares with a forecast of no change.
Core inflation, which excludes volatile prices of food and fuel, was up 1.2% year-on-year in October, quickening from the 1% increase in September and hitting a 20-month high.
Food prices fell 2.9% year-on-year, after dropping 4.4% in September. The October price figures indicate that government efforts to rein in excessive competition have helped stabilise prices, but lukewarm domestic demand and geopolitical tensions continue to cloud the business outlook.
"It is too early to conclude the deflation is over," said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. "We need to wait for a few more months of data to judge if the deflation dynamic has changed fundamentally."
DEFLATIONARY PRESSURES LINGER
China's economic growth slowed to its weakest in a year in the third quarter, and the youth unemployment rate remained elevated despite a dip in September. Policymakers have refrained from aggressive stimulus this year, with the central bank keeping interest rates steady for five months, partly due to resilient exports following a trade truce with the United States.
China has recently unveiled some fiscal and quasi-fiscal policy support measures, but analysts remain divided on whether the central bank will implement further easing measures, such as interest rate cuts, by the end of the year. Last month, China's state planner said 500 billion yuan ($70 billion) in new policy-based financial instruments has been fully allocated, and China has allocated 200 billion yuan in special local government bonds to support investment in some provinces.
China's economy is on track to meet the government's target of around 5% growth this year, but producer deflation, as well as downbeat factory activity and an expected contraction in exports in October, indicate waning growth momentum.
A Reuters poll in October showed China's consumer price inflation will stay flat this year, well below the government's target of around a 2% increase.
Chinese leaders have signalled a sharper shift towards supporting consumption over the next five years, as limited room for investment and trade tensions have exposed vulnerabilities, although measures may take time to yield results.
($1 = 7.1230 Chinese yuan renminbi)
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