The BareStory
Public perception of the U.S. economy has soured over the course of 2025, falling short of optimistic expectations held at the beginning of the year. According to recent polling, 32% of Americans currently view the economy in a positive light. Another survey showed that three-quarters of Americans would give the economy a grade of C, D, or F, with many citing high prices.
Despite negative public sentiment, the economy demonstrated some resilience. Economic growth reportedly surged to a two-year high, and the stock market reached new records, fueled in part by an AI boom. However, the country also faced challenges, including a slowdown in hiring. Experts who graded the economy placed it in the B range, with one from Oxford Economics describing it as resilient but "not spectacular."
The labor market cooled during the year, with the unemployment rate rising to a four-year high of 4.6% in November. Layoffs through November increased 54% from the previous year, reaching 1.1 million. Inflation remained persistent, with the Consumer Price Index holding near 3% for most of the year. In response to the slowing job market, the Federal Reserve cut its benchmark interest rate three times beginning in September.
The Trump administration enacted sweeping tariffs in April and signed a new tax law in July. A White House spokesman, Kush Desai, stated that the economy was significantly better than a year prior, citing cooled inflation, job growth, and tax cuts from the president’s agenda. Experts noted the economic conditions created a "K-shaped" recovery. According to Mark Luschini of Janney Montgomery Scott, high-income consumers benefited from the strong stock market, while lower- and middle-income households struggled with elevated prices. The median age of a first-time homebuyer reached a record 40, which an expert at Redfin attributed to high home values and mortgage rates of around 6.3%.
How it may affect me
As a U.S. reader:
• Your daily expenses may remain high due to persistent inflation near 3%, a struggle noted particularly for lower- and middle-income households.
• Finding new employment could be more challenging, as the unemployment rate is at a four-year high and layoffs have increased 54% from last year.
• Aspiring first-time homebuyers may face significant hurdles, with the median buyer age hitting a record 40 due to high home values and mortgage rates.
• The cost of new loans, such as for cars, may decrease following three recent interest rate cuts by the Federal Reserve.
