The US Economy Is Still Growing, But the Wind Is Slowing
Throughout 2025, the big picture is this: the US economy is still moving (economic activity is said to be growing "at a moderate pace"), but its momentum feels increasingly mixed—some sectors are resilient, others are starting to slow. The market and the Fed are also increasingly entering a "cautionary" mode, as recent data suggests the economy is not in freefall, but also not as strong as in previous periods.
Inflation-wise, price pressures have not yet returned to the Fed's 2% target. The latest CPI data released (September) still shows annual inflation of 3.0% (core also 3.0%), meaning prices are still significantly higher than the central bank's target. This is why expectations of further interest rate cuts are a tug-of-war: there is room for easing, but inflation is not yet "completely safe."
In terms of employment, the signals are: cooling, not collapsing. The latest report shows jobs added in November of around 64,000, while unemployment rose to 4.6% (the highest since 2021). This has led the market to interpret the situation as a slowly weakening job market—enough to keep the "rate cut" conversation alive, but not bad enough to force the Fed to cut again anytime soon.
Manufacturing also tends to be weak: the November ISM Manufacturing PMI was 48.2 (below 50 = contraction), indicating the factory sector is still struggling. The combination of above-target inflation, a cooling labor force, and contracting manufacturing makes the US economy appear "stable but fragile": growing, but easily shaken by data surprises or geopolitical events. (mrv)
Source: Newsmaker.id
