I’ve been arguing with my uncle about the economy for months. He keeps saying everything’s fine because the stock market’s up. Meanwhile, I’m spending $6 on a dozen eggs. What is the current state of the US economy? Good question. The answer changes depending on whether you’re looking at spreadsheets or your bank account.
The Numbers Look Pretty Good
GDP is at about $29 trillion. The U.S. economy today in trillion dollars sounds impressive until you realize that number doesn’t tell you anything about how life actually feels. Third-quarter growth was strong – around 3.8%. Unemployment is sitting at 4.2%, which historically is pretty low. The Fed says Q4 might hit 4.0% growth. On paper, things are humming along just fine. The stock market kept climbing through most of 2025. My buddy with his 401 (k) won’t shut up about it. Happy for him, but that doesn’t help me at the grocery store.
But Everything Costs Too Much
Here’s where the disconnect happens. Inflation came down to 2.7% by September. That’s way better than the 9% disaster from 2022. But prices didn’t drop back down. Your grocery bill didn’t get smaller just because inflation slowed. It’s still higher than three years ago. Yeah, the rate of increase slowed. Congratulations, things are getting more expensive more slowly now. Housing got absolutely destroyed. Interest rates stayed high most of the year. Mortgages are expensive. Good luck being a first-time buyer right now. Rent’s still brutal, too. Landlords didn’t suddenly decide to charge less just because inflation eased up. You’re paying more than last year, no matter what the fancy economic reports say.
The Government Shutdown Wrecked Everything
From late September through early November 2025, the federal government shut down for 43 days. Longest one ever. Federal workers didn’t get paid. Contractors got stiffed. Economic data stopped coming out, which made businesses fly blind, trying to make decisions. Total mess. Economists figure it knocked about half a percentage point off Q4 growth. That output should come back once everything restarts, but try telling that to someone who missed six weeks of paychecks.
Tariffs Keep Making Things Worse
What is wrong with the economy today? Well, tariffs aren’t helping. Average tariff rates jumped to somewhere around 15-20% on certain goods this year. Who pays for that? You do. Companies just pass the cost along. The Supreme Court’s supposed to rule on whether some of these tariffs are even legal. The hearing was on November 5th. Still waiting to see what happens. If they strike down the tariffs, maybe prices will drop. If they don’t, we’re stuck with them. Nobody knows yet.
Immigration Stuff Messed Up Labor
Net immigration took a tumble in 2025. Tighter borders, more deportations. That made the supply of labor fall just when businesses still needed workers. Early in 2024, there were a lot more jobs open than people looking. By November 2025, that gap had narrowed, but not because more Americans got jobs. It closed because deportations reduced the workforce. Baby boomers keep retiring, too. Participation in the labor force has shrunk to 62.7%, from 67.1% in 1997. Fewer people working or looking for work means the economy can’t grow as much.
Tax Cuts Helped Rich People Mostly
The 2025 reconciliation act made Trump-era tax cuts permanent. Added some business tax breaks, too. Middle-class families might’ve saved a few hundred bucks. Nice, sure. But it doesn’t mean much when your rent went up $200 monthly. Those tax cuts are gonna blow up the deficit over the next decade. The Congressional Budget Office says it’ll add trillions to the debt. Problem for later, I guess.
Interest Rates Finally Started Dropping
The Fed kept rates high through mid-2025, trying to kill inflation. By late summer, they started easing up a bit. The 10-year Treasury yield dropped from over 4.6% to near 4% by October. Better for anyone buying a car or refinancing a house. Still not as cheap as 2020-2021, when money was basically free, but better than early 2025. The Fed’s being really careful, though. They don’t want to cut too fast and let inflation spike again. So rates are coming down slowly, which means borrowing stays expensive longer.
How Bad is the U.S. Economy Right Now?
Officially, it’s growing about 1.8% for 2025, probably slowing to 1.5% next year. Not a recession, but not exactly booming either. Unemployment’s low. But job openings are dropping. Layoffs are ticking up in tech and finance. The job market’s cooling off. Inflation came down from 9% to 2.7%. But nobody’s throwing a party because everything still costs more than in 2019. Eggs, bread, gas – all more expensive. Slower increases don’t mean cheaper stuff.
People voted in the 2024 election based on how they felt about the economy. The new administration promised to fix things. Then they raised tariffs and restricted immigration, which created new problems.
Next Year Looks Meh
Forecasters think GDP growth hits maybe 1.5-1.8% in 2026. Slower than this year. Not recession territory, but not great. If tariffs stay and immigration stays low, growth could be even weaker. Some predictions have it dropping below 1.5% with inflation creeping back up. That’s stagflation – slow growth plus rising prices. The Fed would have to pick between fighting inflation and supporting growth. Can’t do both. They’d probably fight inflation, which means higher rates for longer, which means slower growth. The whole thing’s a mess.
Who’s Actually Winning?
Stock market investors did great. The S&P 500 hit records through Q3. If you’ve got a fat 401 (k), you’re probably fine. The tech sector kept rolling despite some layoffs. AI companies, especially. Money’s pouring into anything AI-related. Upper-income people benefited from stock gains, tax cuts, and strong wage growth in high-skill jobs. They’re doing alright. Everyone else?
Wages went u,p but not as fast as prices. Real purchasing power dropped. You got a 3% raise, but groceries went up 5%. You’re actually worse off.
The Truth Nobody Wants to Hear
The economy’s functioning. It’s not collapsing. But it’s not working for regular people trying to afford rent, groceries, and gas. What is the current state of the US economy in November 2025? Slow growth, low inflation, low unemployment, and most people still can’t afford anything. GDP is growing at about 1.8 per cent this year, maybe 1.5 per cent next year. The stock market’s up if that matters to you. Most people don’t have significant stock holdings, though. The disconnect is wild. Official numbers say things are okay.
People’s bank accounts say otherwise. Both are true at the same time. The government shutdown in Q4 made things worse temporarily. Tariffs keep prices high. Immigration restrictions hurt labor supply. Tax cuts helped people who were already doing fine. My uncle still thinks everything’s great because his portfolio’s up. I’m still paying $6 for eggs. That’s where we’re at. The economy’s expanding on paper. In real life, it feels like you’re getting squeezed from every direction. Housing costs more, food costs more, everything costs more. Numbers say one thing. Your wallet says another. Welcome to 2025.
