The economy and markets can feel dizzying and ever changing. That’s where we can help. Fisher Investments’ “This Week in Review” is a weekly segment designed to highlight a few things you may have missed this week, what they could mean for financial markets and why they matter to investors like you.
This week, we’ll be covering:
Japan’s Q3 GDP contraction
The delayed US September jobs report
Navigating short-term market volatility
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Transcript
Mathew White
Hello and welcome to This Week in Review. This weekly segment is designed to highlight a few important developments you may have missed this week, what they may mean for markets, and most importantly, the potential impact for investors. To stay up to date with our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. Now, let’s review what happened this week.
First, Japan’s Q3 2025 GDP contraction.
This week, Japan reported its third quarter 2025 GDP contracted 1.8% annualized. This was a reversal from the past several quarters of growth. At first glance, contracting economic growth might seem troubling, but before investors jump to any conclusions, we think it’s helpful to take a closer look at some of the underlying data. Japanese exports dropped 4.5% annualized, subtracting one percentage point from GDP growth. However, this drop followed a sharp surge in the second quarter as businesses reacted to a temporary tariff pause, pulling demand forward. Recent data indicates export volumes are already rebounding since the third quarter, pointing to a short-lived downturn. But exports weren’t the biggest detractor in Japan’s latest GDP report.
he largest drag was a steep 32.5% annualized decline in residential real estate, linked to new building code regulations introduced in April. These changes led to increased paperwork and costs, causing delays in construction, a disruption expected to ease as the industry adapts. Despite these sector specific setbacks, we think Japan’s underlying economy remains resilient. Consumer spending rose and business investment grew robustly, reflecting continued confidence. Japan has experienced brief periods of economic decline before, including a stretch of three consecutive quarterly contractions from the third quarter of 2023 through the first quarter of 2024. So, a single quarter of negative growth doesn’t automatically mean the country is heading into a long-term recession. And it certainly doesn’t make a global recession more likely. Overall, we think this latest release highlights the importance of looking past headline GDP numbers to truly understand economic health.
Next, the delayed US September jobs report. On Thursday, the US Bureau of Labor Statistics released long awaited September labor data. These releases, which were initially delayed because of the US government shutdown, reflected a trend of slowing hiring seen throughout 2025 in private payroll data. The report showed that unemployment ticked up from the previous month to 4.4%, but the US economy added 119,000 jobs in September, defying analysts expectations of 50,000. Although many are scrutinizing this jobs report even more because of the delay, we don’t think this scrutiny is entirely justified.
First, jobs market data is inherently backward looking. It tells us about staffing decisions made months ago, not what’s coming next. This is even more true for a report released over a month later than usual. Next, while some may worry about a cooling labor market, it’s important to remember that markets are forward looking. They typically don’t move on old news that is often revised later. We already have more current, albeit mixed, private jobs data for October. ADP’s report showed better than expected job additions, while the Challenger report indicated a jump in layoffs. Ultimately, most of the focus on this report is about its potential influence on the Fed’s next policy rate decision. But with the Fed’s decision for December and beyond still unclear, it’s crucial not to place too much weight on any single data release or to assume Fed decisions can be reliably predicted. Jobs data are just one piece of a much larger economic picture, and it’s impossible to know exactly how Fed officials will interpret this or other upcoming data ahead of their December meeting.
Finally, volatility returns to stocks and crypto. Market volatility continued this week, with cryptocurrency and Technology stocks taking a hit. While many are scrutinizing these short-term swings for deeper meaning, we’d encourage long-term investors to not get caught up in these day-to-day moves. With tech stocks falling more sharply during recent market volatility, some investors worry about a potential AI fueled bubble bursting, making parallels to the 1990s Tech bubble. During the.com boom, unprofitable companies leveraged significant debt and equity issuance. Today’s AI investment, on the other hand, has been funded by strong profitability, growth and balance sheets of large Tech firms. To us, the expectation of a bubble bursting is a sign of fear, not investor euphoria. And while it can be understandably uncomfortable, stock market volatility is part and parcel to investing. As we regularly note, reaping long-term bull market returns often involves weathering these periods of negative volatility. Volatility is an inherent part of investing, but maintaining perspective is key. For long-term investors, staying grounded in fundamentals and avoiding emotionally driven decisions during short-term market swings can keep you on course towards achieving your financial goals.
Cryptocurrency has also been hit particularly hard recently, but extreme levels of volatility are nothing new for these investments. Over the last five years, the S&P 500 has experienced six days where stocks have fallen 5% or more. For comparison, Bitcoin has experienced 200 days where it’s fallen 5% or more. And since October’s all time high of $126,000, it’s fallen 28%, erasing all of its gains this year. Most of the focus on crypto’s volatility stems from its growing presence in financial media, including proposals for its inclusion in 401Ks. But it’s crucial not to mistake speculative tools for long-term investment strategies. While we aren’t inherently for or against cryptocurrencies, we don’t think they are beneficial as a prominent part of a long-term, growth oriented portfolio. That’s it for this week.
Thanks for tuning in to This Week in Review.
If you’re looking for more insights, then don’t miss our other series, 3 Things You Need to Know This Week, released every Monday. You can also visit FisherInvestments.com any time for our latest thoughts on markets. Thanks again for joining us, and don’t forget to hit “Like” and “Subscribe!”
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