UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Fearing fear'
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Oct 31, 2025 The lack of US income and spending data due to the government shutdown raises concerns about recession risks. The resilience of middle-income consumers is being spotlighted, as credit card data suggests they are keeping the economy afloat. However, prolonged data absence breeds rumors that could damage employment confidence. Meanwhile, German consumers show surprising strength amid weaker GDP figures, while euro area inflation remains muted. Finally, US officials discuss Argentina's peso volatility, balancing speculation with economic fundamentals.
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Data Void Fuels Fear Risk
- The US lacks timely consumer income and spending data because of a non-functioning government shutdown.
- This absence increases the risk that rumor and fear, not facts, will influence consumer confidence and the economy.
Middle-Income Consumers Are The Recession Buffer
- Middle-income consumer resilience has prevented a US recession so far this year.
- If fear of unemployment rises, that resilience could quickly reverse and create downside risks.
Card Data Masks Deeper Uncertainty
- Credit card data indicate consumption continues, though online retail can distort the picture.
- The longer data gaps persist, the more bad or fake news can spread and damage employment confidence.