Weekly Global Economy Overview: October 13–17, 2025

A quiet Monday of holidays in Canada and Japan masked a clearer signal by week’s end: growth is still alive, but it’s uneven and interest rates are still biting.

Think of three tracks—Europe gently cooling, the United States split between factories and housing, and Asia pulling in two directions.

Europe first. Inflation continued to ebb (euro area CPI 2.2% y/y; core 2.4%), the kind of progress central banks hoped for, but activity wobbled (industrial production −1.2% m/m).

Germany showed why this disinflation doesn’t feel like a boom: wholesale prices rose only 0.2% m/m, and the ZEW survey had expectations at 39.3 while “current conditions” sank to −80.0.

The UK is rebalancing: unemployment ticked up to 4.8%, pay growth slowed to 4.7% y/y, yet August GDP nudged +0.1% m/m as manufacturing bounced 0.7%—a cooler labor market without a collapse in output.

The United States told a split story. Small-business confidence softened (NFIB 98.8) but New York factory sentiment popped to +10.7.

Housing remained the brake: homebuilder sentiment fell to 37 and mortgage rates hovered near 6.42%.

A $198.0B September budget surplus and smoothly clearing T-bill auctions show funding markets calm even as high rates weigh on interest-sensitive sectors.

Asia was the study in contrasts. China’s prices fell again (CPI −0.3% y/y; PPI −2.3% y/y). Credit was plentiful—new loans CNY 1.29T, M2 up 8.4%—but that money is not yet translating into stronger demand.

Meanwhile, Singapore outperformed (Q3 GDP 2.9% y/y; 1.3% q/q) and South Korea kept exporting strength alive (exports +12.6% y/y; $9.53B surplus). Japan’s pulse softened (industrial production −1.5% m/m; core machinery orders −0.9%).

In major emerging markets, Brazil looked steady rather than hot: services +0.1% m/m (+2.5% y/y), retail +0.2% m/m (+0.4% y/y), and the IBC-Br activity proxy +0.40% m/m.

India’s wholesale inflation cooled to 0.13% y/y as food prices fell, but a wider trade deficit ($32.15B) flagged firm import demand.

The story behind the story: policy and prices are normalizing, but unevenly.

• Europe is approaching “2% territory” with weak manufacturing;
• the US expansion still depends on sectors less sensitive to rates;
• China’s challenge is not credit supply but household and private-sector demand; and
• energy loosened at the margin (US crude inventories +3.524M barrels; refinery utilization −6.7 percentage points).

For readers abroad, that means milder inflation pressure globally, but growth that will feel stop-go—favorable for high-quality bonds, selective for equities, and still highly sensitive to any surprise from energy or China’s demand recovery.

Bottom line: we’re drifting toward normal, just not all at the same speed.

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