The climbing limo method of forecasting future GDP in the United States projects the nation's economic output in the now-finished third quarter of 2025 will be around $32.7 trillion.

That estimate was generated using one of the simplest of forecasting methods. We pulled the just-revised nominal GDP estimates for the second and fourth quarters of 2025s, drew a line through them, then extended the line out three more quarters into the future to project that estimate!

That's how the Climbing Limo forecasting method works, which is just as simple as it sounds. In doing that, we're assuming that whatever momentum the U.S. economy had going in the last half of 2025 will make itself known in the quarter that just came to an end on 30 September 2026.

How well does that method work in practice? You can see for yourself in the following chart shows the climbing limo method's forecast against the recorded nominal GDP over the past 12 quarters for which GDP data has been finalized. At least, as that data has been finalized outside of the BEA's annual revisions like the one they just released covering the period from 2021-Q1 through 2026-Q2, which the chart incorporates across the board for the period it covers.

One of the neater things about the Climbing Limo forecasting method is that even when it's way off, as can happen when new periods of recession or recovery take place, it's still giving you important information about how the economy's momentum is changing. Not that it matters for the particular period covered in the chart.

Getting back to 2026-Q3's projected nominal GDP, the Climbing Limo forecast is anticipating very little change from the nominal GDP level of 2026-Q2, although we anticipate the actual GDP level will come in higher than this projection. The initial estimate of 2026-Q3's GDP will be released later this month, but will be revised at least two more times over the next two months as more data is collected before it is relatively settled.

The chart also shows the projections for what the Climbing Limo anticipates for GDP in the fourth quarter of 2026 and the first quarter of 2027. We'll be discussing 2026-Q4's projected GDP in the next edition of this series, before its initial estimate becomes available at the end of January 2027.

References

U.S. Bureau of Economic Analysis. National Income and Product Accounts. Table 1.1.5. Gross Domestic Product. [Online Database]. Accessed 30 September 2026.

Political Calculations. Forecasting GDP Using the Climbing Limo. [Online Tool]. 10 May 2005.

Image Credit: Microsoft Copilot Designer. Prompt: "A long limousine driving up a bumpy chart showing GDP growth".

It's an odd time of year with the seasonal adjustments for teen jobs. The raw data says the number of working teens between the ages of 16 and 19 declined month-over-month in September 2026. But after seasonal adjustments, the number of U.S. teens counted as being employed rose sharply during the month.

Practically, that means the raw decline that took place between August and September for the number of teens with jobs was much smaller than what the seasonal adjustment predicts, with the result the data is transformed into an increase after the seasonal data adjustment. Here are the non-seasonally adjusted employment numbers for all teens Age 16-19, including the break downs for younger teens (Age 16-17) and older teens (Age 18-19):

Non-Seasonally Adjusted Employment Data

• Age 16-19: 5,317,000 (Decrease of 427,000)
• Age 16-17: 2,035,000 (Decrease of 27,000)
• Age 18-19: 3,282,000 (Decrease of 400,000)

Now, here's what the teen jobs numbers look like after the Bureau of Labor Statistics' seasonal adjustments for each data series is applied. In reviewing these figures, note that since each demographic group gets its own seasonal adjustment, the numbers for the younger and older teen subgroups may not add up to the number for the combined working teen population.

Seasonally Adjusted Employment Data

• Age 16-19: 5,535,000 (Increase of 162,000)
• Age 16-17: 1,973,000 (Increase of 117,000)
• Age 18-19: 3,556,000 (Increase of 57,000)

Perhaps the biggest surprise in the seasonally adjusted employment data is the large gain shown for the number of working younger teens. It indicates more younger teens effectively stayed on the job from August to September 2026 than would be typical for this month, which accounts for the apparent surge for both younger teens and most of the increase for the combined Age 16-19 population.

The following pair of charts shows the monthly seasonally adjusted data for the working teen demographic from January 2020 through September 2026.

It's too early to tell if that seasonally-adjusted increase might be the start of a reversal of a long-running downward trend for teen employment for younger teens, but we'll learn more next few months as new employment data becomes available.

Image Credit: Help Wanted photo by Tim Mossholder on Unsplash.

The S&P 500 (Index: SPX) was nearly unchanged over the past week. The index dipped 0.28% from where it closed the preceding Friday, winding up the trading week ending on Friday, 2 October 2026 at 7,722.72.

While it might seem mostly balanced, that tiny, bearish change is masking some much bigger changes within the index over the past month.

That difference can be seen by comparing the trajectories of the regular market cap-weighted index and the equal-weighted version of the S&P 500, which we'll represent with Invesco's S&P 500 Equal Weight ETF (NYSE: RSP). The market cap-weighted S&P 500 declined 0.32% over the month from 3 September 2026 to 2 October 2026, while the equal-weighted version of the S&P 500 fell 4.69%.

The difference between the two versions of the S&P 500 index is being driven by the global bond rout that's been taking place over this time, which has seen U.S. long-term bond yields rise as both Japan and France have seen their bond yields spike as both are experiencing debt crises.

In the U.S., the ongoing global bond rout has pushed up the yields of U.S. Treasuries to their highest levels in decades, also boosting U.S. interest rates. Consequently, interest rate sensitive stocks in the S&P 500 have been beaten down as bond yield have risen, subjecting the overall index to downward forces.

But the market cap-weighted S&P 500 has avoided plunging because it is being buoyed up by big tech stocks from the companies making big investments in Artificial Intelligence (AI) technologies, whose stock prices have increased in this period. The rise of big AI stocks is mostly offsetting the gravitational pull of the global bond rout. At least, so far.

The following chart shows the divergence between the market cap-weighted S&P 500 and the equal-weighted version of the index.

The latest update of the dividend futures-based model's alternative futures chart shows the battle between rising AI tech stocks and all other stocks is keeping the index right about where it would be expected to be provided investors are focusing on the now current quarter of 2026-Q4 in setting overall stock prices.

Here is our sampling of the random onset of new information that moved markets during the trading week ending on 2 October 2026 as the scariest month for stocks gets underway.

Monday, 28 September 2026

• Signs and portents for the U.S. economy:
• China, US agree tariff cuts on $60 billion of goods including agriculture, household items
• China to cut tariffs on US farm goods, but list excludes soybeans
• Oil prices jump over 4% as Trump rejects Iranian proposal to reopen Strait of Hormuz
• Mideast oil exports rebound in September as Saudi Arabia boosts shipments
• Bigger trouble, stimulus developing in China:
• China's industrial profit growth slows further as economic imbalances deepen
• China's refined copper output on track for lowest growth in decades this year, analysts say
• China's cabinet pledges stronger policy support to meet growth target
• China Extends Mortgages To 40 Years, But Homebuyers Remain Reluctant To Borrow
• BOJ minions thinking about hiking Japan's interest rates more often because of inflation, JapanGov minion hints at more interventions to prop up currency:
• Bank of Japan debated need for faster rate hikes, July minutes show
• Japan's corporate services inflation hits 2-year high
• Japan's currency diplomat Mimura urges markets to heed 'very clear' warning on yen
• ECB minions thinking about fighting Eurozone inflation, slowly:
• ECB's Lagarde sticking to measured steps to quell inflation
• Stocks fall as higher oil prices, Treasury yields weigh
• Markets ended lower as yields climbed and geopolitical tensions remained in focus
• U.S. 10 Year Treasury tops 5.25% as yields continue to climb
• Gold and silver prices fall sharply as higher bond yields weigh on metals

Tuesday, 29 September 2026

• Signs and portents for the U.S. economy:
• China, US pledge tariff cuts on $60 billion of goods including agriculture, toys, toasters
• Target lowers prices on nearly 2,000 items ahead of holiday season
• Oil falls as investors focus on Middle East supply
• Medicare Advantage premiums expected to drop more than 16% in 2027, CMS projects
• US single-family home prices rise in July, FHFA says
• Fed rate hike odds tumble to coin flip after Williams says no rush
• Fed minions see more inflation ahead, not so sure about another rate hike, and worry about not saying enough:
• Fed's Cook sees further inflationary pressures ahead
• Fed's Barr says more rate hikes likely to be needed to curb inflation
• Fed's Williams sees no urgency for next Fed rate hike
• Prospect of Fed pulling too far back on communications poses volatility risk, Musalem says
• Bigger trouble, stimulus developing in China:
• China's AI agents can lie and scheme - just like their US rivals
• China unveils rate cut, mortgage subsidies to spur growth
• China expects trade to grow despite external challenges
• China's Golden Week travel surge masks cautious consumer spending
• China factories seen rebounding in September as Beijing signals more aid
• ECB minions thinking about how to make Euro currency more popular:
• ECB eyes new currency safety nets to boost euro's global role
• U.S. equities closed in the red as oil prices slipped and yields remained in focus
• Equities end slightly lower as bond yields hold near multi-decade highs
• Nvidia sets biggest-ever buyback plan as AI chip competition weighs on stock performance

Wednesday, 30 September 2026

• Signs and portents for the U.S. economy:
• US inflation rises below expectations in August, gives the Fed breathing space
• Core PCE Prints Cooler Than Expected Due To Change In Methodology, As Savings Rate Plunges To 3 Year Low
• US second-quarter GDP revised higher amid robust consumer spending
• US goods trade deficit widens sharply in August
• Oil prices rise by about $1/bbl on stalled US-Iran talks and tight fuel markets
• Fed now expected to sit on hands rather than hike U.S. interest rates quite so soon:
• Fed seen on pause in October after inflation data
• Fed minion says inflation Fed minions have allowed on their watch for years is too damn high:
• Fed's Cook: inflation has been too high for too long
• Former chief minion's overspending on headquarters remodel was bad management, not criminal
• Watchdog finds no Fed misconduct in renovation; Trump calls for Powell's resignation
• AI-related growth signs developing in China:
• Chinese factory activity expands in September amid AI boom
• China services growth hits three-month high, private PMI shows
• BOJ minions thinking harder about hiking Japan's interest rates more often:
• BOJ's policy pivot opens scope for faster rate hikes
• Bigger trouble developing in Eurozone:
• Inflation jumps across euro zone, raising pressure on ECB to hike
• ECB minions standing by to leap into action, chief minion thinking hard about next career move:
• Price expectations and demand key in ECB's next move, Schnabel says
• ECB's Lagarde says it 'would not be a good idea' to run for French president
• S&P 500 dips, Nasdaq higher on modest rise in inflation
• Wall Street ends mixed on last day of September
• U.S. 10-year Treasury yield crosses 5.30% to highest since 2002

Thursday, 1 October 2026

• Signs and portents for the U.S. economy:
• US mortgage rates jump by most in 4 years in latest week
• US manufacturing steady in September, input prices increase
• Oil prices rise 2% as China suspends fuel exports
• Trump says he is still considering diesel export ban
• US construction spending surges in August
• Fed minions say they would like to see lower inflation. And maybe a half point rate hike, but not in October:
• Fed's Kashkari says central bank must lower inflation pressures
• Fed's Kashkari expects more rate hikes, unsure on need to act this month
• Fed's Cook sees AI inflationary push as a top 2027 risk
• Fed's Logan calls for '50 bps or more' in rate hikes
• Bigger trouble developing out of China:
• Chinese refiners suspend October fuel exports to bolster stocks, sources say
• VIEW Chinese refiners suspend October fuel exports, sources say
• Bigger trouble developing in Eurozone:
• Eurozone borrowing costs surge in global bond rout
• Debt Crisis Back? European Bond Markets Crash, CDS Explode Amid France Budget Panic Contagion
• China driving worrying rise in EU imports, Commission official says
• S&P 500 closes higher to start October as Treasury yields retreat from multiyear highs updates
• U.S. equities started Q4 in the green as markets closed slightly higher
• Yields fall after US 10-year hits highest since 2002; US stocks inch up
• Why are world bond markets selling off again?

Friday, 2 October 2026

• Signs and portents for the U.S. economy:
• US job growth undershoots expectations in September, but labor market remains stable
• US job growth expected to slow in September; unemployment rate likely steady
• Oil settles lower after Europe agrees to tap diesel reserves
• US tells France and Germany to release diesel stocks or face US export ban
• Trump: not going to be doing diesel export ban
• US factory orders increase slightly in August
• Fed minions expected to take October 2026 rate hike off the table, Fed minions seem confused about next actions:
• Fed policymakers lean against October rate hike
• Fed may skip October but pull rate hike trigger in December
• Fed's Goolsbee says rate hike and pause both 'on the table'
• Bigger trouble developing out of China:
• China fuel export suspension to choke supplies in Asia
• Bigger trouble developing in Japan, BOJ minions get data supporting their plans to hike Japan's interest rates more:
• Japan's unemployment rate rises to 2.5% in August, above expectations
• Tokyo core inflation rate jumps in September, bolsters case for more BOJ hikes
• Bigger trouble developing in Eurozone, ECB minions counting on Eurozone debt crisis to counter inflation:
• Euro zone inflation surges more than expected
• ECB's Rehn says soaring yields may curb inflation impact of expensive energy
• S&P 500 ends week lower despite Friday rally
• Stocks climb after weak US jobs data, but bonds resume selling
• Global bond rout deepens, pushes US Treasury yields to 24-year peak

The CME Group's FedWatch Tool no longer anticipates a quarter point rate hike when the Fed meets to consider how to set the Federal Funds Rate on 28 October (2026-Q4). Instead, it now anticipates the Fed's next adjustment to interest rates will still be a quarter point increase, coming when the Fed meets on 9 December (2026-Q4).

Looking beyond that date, the FedWatch Tool projects the Fed will keep hiking rates a quarter point at a time at twelve-week intervals, with at least three rate hikes predicted in 2027. Those forecast hikes would be announced on 17 March (2027-Q1), 9 June (2027-Q2) and 15 September (2027-Q3).

The Atlanta Fed's GDPNow tool's projection of real GDP growth for the U.S. economy in 2026-Q3 declined to 3.7%, falling from the +5.0% annualized growth it forecast a week earlier.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull and bear examining a perfectly balanced scale labeled 'AI STOCKS' (green pan) and 'ALL OTHER STOCKS' (red pan), set against a Wall Street background."

The S&P 500 (Index: SPX) continued tracking along above its mean trendline with respect to its trailing year dividends per share in September 2026. The index stayed mostly within one standard deviation of its long-established central trend during the month.

Through the end of trading on Wednesday, 30 September 2026, the index' closing value of 7,651.54 per share is half a standard deviation above its mean trend and is slightly below its trailing 20-day moving average of 7,671.31. The S&P 500's trailing year dividends per share came in at 82.89 per share during the calendar month.

The following chart visualizes the relationship between the value of the S&P 500 and its underlying trailing year dividends per share from 29 December 2023 through 30 September 2026:

The S&P 500's current period of relative order with respect to the index' underlying trailing year dividends per share has been in place since the end of 2023. While we're using the kind of analysis that applies to standard normal distribution bell curves from statistics to describe the variation of stock prices during that now long-established trend, that variation is not really normal.

You can see that in the data, with a much higher than expected number of data points within one standard deviation of the central trendline than would be predicted using a normal distribution to quantify the variation. There's also a higher than expected number of data points falling more than three standard deviations away from it.

That's a characteristic of a Lévy alpha-stable distribution, which looks more like the red curve on our featured chart illustration than it does like the green Gaussian normal distribution. Which is to say that stock prices can have stable distributions about central trends, but aren't really normal!

Image Credit: Levy distribution probability distribution functions by PAR on Wikimedia Commons. Public domain image.

Motio Research's initial estimate of U.S. median household income for August 2026 is $88,190, a $380 (or 0.43%) increase from the firm's initial estimate of $87,810 for July 2026. The month-over-month increase reverses the declines Motio Research reported for each of the preceding two months.

Here are screenshots of the interactive charts Motio Research provides to visualize trends in the U.S.' median household income. The first chart presents the firm's Household Income Index, which is based on three-month moving average that sets the period of January 2010 through March 2010 at a value of 100 after making adjustments for inflation and seasonality in the data. The second chart presents their monthly median household income estimates in nominal (not adjusted for inflation) terms for the period from January 2010 through August 2026.

Monthly Household Income Index

Median Household Income Estimates

The U.S. Census Bureau announced its estimate of median household income for the 2025 calendar year on 15 September 2026, reporting it reached $87,460. This estimate is based on household income data collected through the Annual Social and Economic Supplement (ASEC) survey that the Census Bureau conducted in March 2026. The ASEC survey collects data from about 95,000 U.S. households.

Motio Research's monthly median household income estimates are compiled from data the Census Bureau collects from about 50,000 U.S. households through its monthly Current Population Survey (CPS).

Analyst's Notes

Political Calculations produces monthly median household income estimates using an alternate methodology that complements Motio Research's survey-based estimates. In August 2026, Political Calculations' initial estimate of median household income is $88,574. This estimate is $424 (or 0.5%) higher than our initial estimate of $88,150 for July 2026's median household income.

The following chart presents our estimates of U.S. median household income, both adjusted for inflation (blue) and not-adjusted for inflation (red) for each month from January 2000 through August 2026.

Political Calculations' August 2026 estimate is $384 (0.4%) above Motio Research's estimate of $88,190. The negative momentum Motio Research has observed in their monthly data series is so far not registering in the aggregate income data we use to derive our estimates.

The aggregate wage and salary income data we utilize in producing our complementary median household income estimates underwent a substantial revision in the 30 September 2026 data release. The revisions extend back to January 2021 and update previously reported data through July 2026.

The revisions can be divided into three basic categories:

• January 2021 - December 2023: Small, with revisions typically ranging within 0.10% of the previously reported value.
• January 2024 - December 2025: Moderate, with revisions often revised upward between 0.10% and 0.55%, though three of the 24 months in this period had negative adjustments.
• January 2026 - July 2026: Large, with universally positive upward adjustments ranging from a low of 0.43% in January 2026 to a high of 0.89% in June 2026. July 2026's aggregate income data was revised upware by 0.85% above it's previously reported level.

The BEA's revised data has been incorporated in our modeling to produce updated estimates for the period from January 2021 thorugh July 2026, which are visually presented in our chart.

References

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 30 September 2026. Accessed: 30 September 2026.

U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 30 September 2026. Accessed 30 September 2026.

Image credit: U.S. Census Bureau. We modified the public domain image to make it more generally applicable beyond reporting the median household income from 2022.