Economic Pulse: November 2025
Executive Summary
As November 2025 unfolds, the global economy has been stress-tested by structural challenges. While inflation is moderately moving towards central bank targets, several successive rate cuts in the EU and US have been implemented and underlying growth momentum is weakening.
Our Sector Navigator is showing a large and widening gap (>5%) in momentum between Comms, Tech, Utilities and the rest of the sectors. It seems the Q4 global economy is growing solely on the back of AI and AI infrastructure while physical production and services sectors are dragging.
The Big Picture: Global Growth Remains Stable, But Stalling
Global growth outlook remains anchored at modest levels. The International Monetary Fund projects global GDP growth of 3.2% for 2025 (revised up from 3.0%), followed by 3.1% in 2026.
Advanced economies are showing particular weakness, with the US growing at 2.0% (revised from 1.9%), the eurozone at 1.2% (revised from 1.0%), and Germany stalling at 0.2% (!). Emerging markets like China (4.8%) and India (6.6%) provide some momentum, but even China's growth trajectory has slowed sequentially—dropping from 5.4% in Q1 to 4.8% in Q3 2025.
With the US economic data releases paused during the government shutdown, the last inflation (CPI) update stood at 2.96%, slowly approaching the Federal Reserve's 2% target. Central bankers have repeatedly named trade policy uncertainty as a risk factor, particularly if tariffs deepen.
The US manufacturing sector is in formal contraction. The ISM Manufacturing PMI fell to 48.7 in October 2025, marking eight (!) consecutive months of contraction.
Labor market deterioration is becoming more visible. While headline unemployment rate has only risen slightly from the 2024 lows, the ISM point to ongoing employment pressure: businesses are managing through the tariff shock not by raising prices, but by cutting costs and delaying investment.
China: Slowdown Accelerates, Property Sector Drags
China's growth has visibly slowed. GDP growth decreased to 4.8% year-on-year in Q3 2025, down from 5.4% in Q1. While Beijing's targets remain in the 5% range for 2025, achieving this will require policy support to accelerate in Q4.
Export momentum is fading. Tariffs have shifted Chinese exports away from the US toward other markets, but slowing demand eventually constrains this strategy.
Data Sources:
S&P Global (2025). Week Ahead Economic Preview
IMF World Economic Outlook (2025)
Cleveland Federal Reserve. Inflation Nowcasting (November 2025)
IMF Global Growth Forecast (October 2025)
Federal Reserve, Fed Funds Rate Decision (October 2025)
KPMG. US Tariffs Impact on German Companies (November 2025)
National Bureau of Statistics, China. Economic Data (Q3 2025)
ISM Manufacturing and Services PMI (October 2025)