The Federal Reserve’s October 2025 outlook reveals three economic signals converging right now that require a strategic playbook. On October 6, Kansas City Fed President Jeff Schmid highlighted these shifts directly impacting your business strategy.
Signal 1: Inflation And Rising Prices
Inflation now touches 80 percent of consumption categories. Utilities are climbing. Durable goods are rising for the first time in 30 years outside the pandemic. Services inflation is averaging 3.5 percent, well above the Fed’s 2 percent target. For small businesses, this means direct pressure on costs and margins.
Signal 2: Hiring Has Dramatically Slowed
Job growth collapsed from over 200,000 monthly positions to just 25,000. Almost two-thirds of the 1.5 million jobs created over the last year were in health care and social assistance. Excluding healthcare, other sectors experienced job declines. This data reveals genuine softening demand across most of the economy. For small business owners, this cooling labor market creates an immediate advantage: lower wage pressure and easier access to qualified talent.
Signal 3: Banks Are Still Lending
Despite economic headwinds, credit remains accessible. Stock markets remain strong near record highs. Financing is available now. This window won’t stay open indefinitely.
What This Means For Your Business
These three signals create a strategic opportunity with a time limit. Rising costs demand efficiency improvements and strategic investments. Cooling hiring means now may be a great time to build your team with lower wage pressure. And, with banks lending, consider whether this is an opportunity to refinance debt or invest in growth while favorable terms exist.
The convergence of these three conditions is temporary. Small business owners who act strategically now position themselves ahead of those waiting for clarity.
We can help you thrive in this environment.
Our team works with business owners to strengthen strategy, improve financial readiness, and stay lender-ready through shifting conditions. Connect with us today.