Tag: politics

The Markets (as of market close September 4, 2026)

Most of the major market indexes closed the week moderately higher, despite a late-week pullback. Investors had to weigh strong corporate earnings and economic resilience against concerns that the Federal Reserve may hike interest rates later this month following the unexpectedly robust jobs report (see below). Market sectors were mixed, with energy and communication services posting gains, while industrials, materials, and real estate lagged. Treasury yields moved higher last Friday after the release of the jobs report. Crude oil prices climbed nearly 9.5% last week as tensions between the U.S. and Iran continued to drive market sentiment.

Stock Market Indexes

Market/Index	2025 Close	Prior Week	As of 9/4	Weekly Change	YTD Change
DJIA	48,063.29	53,559.99	53,414.25	-0.27%	11.13%
NASDAQ	23,241.99	26,402.42	26,506.99	0.40%	14.05%
S&P 500	6,845.50	7,711.76	7,718.60	0.09%	12.75%
Russell 2000	2,481.91	2,972.37	2,975.65	0.11%	19.89%
Global Dow	6,169.34	7,071.23	7,104.09	0.46%	15.15%
fed. funds target rate	3.50%-3.75%	3.50%-3.75%	3.50%-3.75%	0 bps	0 bps
10-year Treasuries	4.16%	4.72%	4.78%	6 bps	62 bps
US Dollar-DXY	98.26	99.67	99.16	-0.51%	0.92%
Crude Oil-CL=F	$57.46	$83.43	$91.33	9.47%	58.95%
Gold-GC=F	$4,323.90	$4,506.30	$4,477.40	-0.64%	3.55%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Job growth far exceeded expectations in August after increasing 162,000. Coupled with upward revisions in June and July, total employment from June through August increased 214,000, well above the average monthly gain of 31,000 over the prior 12 months. The total number of employed people increased by 569,000 in August. The unemployment rate, at 4.1%, was unchanged last month. The labor force participation rate, at 61.6%, and the employment-population ratio, at 59.1%, each increased 0.2% in August. The number of unemployed rose 115,000 to 7.0 million. The number of long-term unemployed (those jobless for 27 weeks or more) rose 159,000 to 1.9 million in August. The long-term unemployed accounted for 27.0% of all unemployed people. In August, average hourly earnings increased $0.10, or 0.3%, to $37.75. Over the year, average hourly earnings have increased by 3.1%. The average workweek edged up by 0.1 hour to 34.4 hours in August.
• The Job Openings and Labor Turnover Summary, released September 1, is for July. The number of job openings in July, at 7.3 million, was little changed from the June estimate. The number of hires fell 278,000 in July to 5.1 million. The number of total separations fell 265,000 in July from the previous month. The number of job openings for June was revised down by 177,000 to 7.2 million, the number of hires was revised down by 16,000 to 5.3 million, and the number of total separations was revised down by 14,000 to 5.3 million.
• Manufacturing improved at a solid pace in August, according to the S&P Global US Manufacturing PMI®. However, stock building was a key driver of growth in the manufacturing sector as production and new orders eased amid concerns that further price increases and material shortages would weigh on the sector.
• The U.S. services sector saw business activity accelerate, according to the latest PMI®data from S&P Global. The upturn in activity was supported by the strongest rise in new business since December 2024. In response to increased demand, service providers accelerated employment. On prices, firms reported an easing of inflationary pressures from July’s recent high, although both input cost and output charge inflation stayed well above their series averages.
• The goods and services trade deficit was $88.6 billion in July, up $17.4 billion, or 24.4%, from the June estimate. In July, exports declined $6.6 billion, or 2.1%, while imports rose $10.8 billion, or 2.8%. In 2026, the goods and services deficit decreased $188.4 billion, or 29.6%, from the same period in 2025. Exports increased $237.2 billion, or 12.0%. Imports increased $48.8 billion, or 1.9%.
• For the week ended August 29, there were 206,000 new claims for unemployment insurance, an increase of 2,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended August 22 was 1.2%, unchanged from the prior week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended August 22 was 1,779,000, an increase of 8,000 from the previous week’s level, which was revised down by 7,000. States and territories with the highest insured unemployment rates for the week ended August 15 were New Jersey (2.6%), Puerto Rico (2.6%), Rhode Island (2.2%), Massachusetts (2.1%), Minnesota (2.0%), Oregon (2.0%), Washington (1.9%), California (1.8%), Connecticut (1.8%), Nevada (1.7%), New York (1.7%), and Pennsylvania (1.7%). The largest increases in initial claims for unemployment insurance for the week ended August 22 were in Illinois (+631), New York (+514), Texas (+258), Michigan (+229), and Massachusetts (+173), while the largest decreases were in California (-1,049), Kentucky (-583), New Jersey (-519), Florida (-475), and Minnesota (-281).
• The national average retail price for regular gasoline was $4.071 per gallon on August 31, $0.014 per gallon under the prior week’s price but $0.894 per gallon higher than a year ago. Also, as of August 31, the East Coast price increased $0.016 to $3.937 per gallon; the Midwest price fell $0.087 to $3.847 per gallon; the Gulf Coast price declined $0.020 to $3.618 per gallon; the Rocky Mountain price dropped $0.093 to $4.266 per gallon; and the West Coast price advanced $0.059 to $5.206 per gallon.

Eye on the Week Ahead

The focus this week is on inflation data for August with the releases of the Consumer Price Index (CPI) and the Producer Price Index (PPI). July saw the CPI tick up 0.1% after falling 0.4% in June. The PPI was flat in July following a 0.1% (revised) decline the previous month.

The Markets (as of market close June 12, 2026)

Wall Street began last week with a heavy sell-off as investors appeared anxious about the U.S.-Iran war, elevated inflation, and fears of a potential tech correction. However, stocks staged a massive turnaround midweek, driven by easing tensions in the Middle East and the largest initial public offering in U.S. financial history. Consumer staples and real estate led the market sectors, while information technology and communication services lagged. Crude oil prices reached an eight-week low as the potential for a deal to reopen the Strait of Hormuz gained traction. Gold prices declined for a second straight week on improving risk appetite.

Stock Market Indexes

Market/Index	2025 Close	Prior Week	As of 6/12	Weekly Change	YTD Change
DJIA	48,063.29	50,866.78	51,202.26	0.66%	6.53%
NASDAQ	23,241.99	25,709.43	25,888.84	0.70%	11.39%
S&P 500	6,845.50	7,383.74	7,431.46	0.65%	8.56%
Russell 2000	2,481.91	2,833.50	2,943.99	3.90%	18.62%
Global Dow	6,169.34	6,807.04	6,902.85	1.41%	11.89%
fed. funds target rate	3.50%-3.75%	3.50%-3.75%	3.50%-3.75%	0 bps	0 bps
10-year Treasuries	4.16%	4.53%	4.48%	-5 bps	32 bps
US Dollar-DXY	98.26	100.07	99.78	-0.29%	1.55%
Crude Oil-CL=F	$57.46	$90.28	$84.26	-6.67%	46.64%
Gold-GC=F	$4,323.90	$4,344.50	$4,236.40	-2.49%	-2.02%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The Consumer Price Index rose 0.5% in May and 4.2% over the last 12 months, marking its highest yearly level since April 2023. Energy prices, which rose 3.9%, accounted for over 60% of the overall May increase. Prices at the pump increased 7.0% in May and 40.5% over the last 12 months. Prices for shelter rose 0.3% in May, while food prices increased 0.2% over the month. Prices less food and energy rose 0.2% in May and 2.9% from a year earlier, which was the highest rate since September 2025.
• The Producer Price Index rose 1.1% in May, the same increase as in April. Producer prices increased 6.5% for the 12 months ended in May, the largest 12-month rise since moving up 7.4% in November 2022. Nearly 80% of the May advance in overall prices was attributable to a 2.8% increase in prices for goods, which was the largest increase since December 2009, when data was first calculated. Energy prices rose 10.7% in May (of which gasoline prices rose 23.4%), accounting for 80% of the overall increase in prices for goods. Goods prices less foods and energy rose 0.8% last month. Prices for foods increased 0.6%. Prices for services moved up 0.3% in May.
• The latest report on international trade in goods and services from the Bureau of Economic Analysis, released June 9, was for April and revealed the trade deficit was $55.9 billion, 1.2% less than the March estimate. April exports were $327.1 billion, 2.6% more than March exports. April imports were $383.0 billion, 2.0% more than March imports. Thus far in 2026, the goods and services deficit decreased $213.5 billion, or 49.1%, from the same period in 2025. Exports increased $128.2 billion, or 11.3%. Imports decreased $85.3 billion, or 5.5%.
• Sales of existing homes in May increased by 3.2% for the month and 3.2% since May 2025. Inventory sat at a 4.5-month supply in May, unchanged from the previous month but down slightly from 4.6 months one year ago. The median sales price, at $429,300, was 2.8% above the April figure and 1.3% higher than the price in May 2025. Sales of existing single-family homes increased 3.5% from April and 3.3% from a year ago. The median sales price for existing single-family homes in May was $434,300, up 2.9% from April and 1.3% higher than the price from May 2025.
• The government deficit for May was $293 billion. This followed April’s surplus of $215 billion. Through the first eight months of the fiscal year, the deficit sits at $1,246 billion, slightly under the deficit of $1,364 billion over the same period in the prior fiscal year.
• For the week ended June 6, there were 229,000 new claims for unemployment insurance, an increase of 4,000 from the previous week’s level. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended May 30 was 1.2%, unchanged from the prior week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended May 30 was 1,795,000, an increase of 24,000 from the previous week’s level, which was revised down by 6,000. States and territories with the highest insured unemployment rates for the week ended May 23 were New Jersey (2.1%), Washington (2.0%), Massachusetts (1.9%), California (1.8%), Oregon (1.7%), Rhode Island (1.7%), Nevada (1.6%), New York (1.6%), Puerto Rico (1.6%), and Illinois (1.4%). The largest increases in initial claims for unemployment insurance for the week ended May 30 were in California (+3,532), Minnesota (+1,706), Tennessee (+1,671), Ohio (+1,342), and Illinois (+1,203), while the largest decreases were in Texas (-2,125), New Jersey (-901), Kansas (-726), Massachusetts (-669), and Florida (-607).
• The national average retail price for regular gasoline was $4.146 per gallon on June 8, $0.159 per gallon below the prior week’s price but $1.038 per gallon higher than a year ago. Also, as of June 8, the East Coast price decreased $0.145 to $3.990 per gallon; the Midwest price dipped $0.190 to $3.945 per gallon; the Gulf Coast price declined $0.161 to $3.643 per gallon; the Rocky Mountain price decreased $0.135 to $4.194 per gallon; and the West Coast price declined $0.142 to $5.358 per gallon.

Eye on the Week Ahead

The Federal Open Market Committee meets this week. With inflation at levels above the Fed’s 2.0% target and solid job gains, it is unlikely that the Committee will lower the federal funds target rate range at this time.

The Markets (as of market close May 8, 2026)

The U.S. stock market ended last week with strong gains, which led to record highs for the S&P 500 and the NASDAQ. The surge in stock values was largely driven by a better-than-expected jobs report (see below), falling crude oil prices, and robust tech company earnings. Investors continued to favor risk, despite the ongoing tensions in the Middle East. Information technology led the market sectors, while energy and utilities underperformed. Crude oil prices declined as President Trump said the ceasefire with Iran would remain in effect despite fresh clashes between U.S. and Iranian forces. Bond yields changed little last week as uncertainty persisted over how quickly the U.S. and Iran might reach an agreement to end the conflict.

Stock Market Indexes

Market/Index	2025 Close	Prior Week	As of 5/8	Weekly Change	YTD Change
DJIA	48,063.29	49,499.27	49,609.16	0.22%	3.22%
NASDAQ	23,241.99	25,114.44	26,247.08	4.51%	12.93%
S&P 500	6,845.50	7,230.12	7,398.93	2.33%	8.08%
Russell 2000	2,481.91	2,812.82	2,861.21	1.72%	15.28%
Global Dow	6,169.34	6,665.45	6,781.49	1.74%	9.92%
fed. funds target rate	3.50%-3.75%	3.50%-3.75%	3.50%-3.75%	0 bps	0 bps
10-year Treasuries	4.16%	4.37%	4.36%	-1 bps	20 bps
US Dollar-DXY	98.26	98.22	97.86	-0.37%	-0.41%
Crude Oil-CL=F	$57.46	$102.60	$94.84	-7.56%	65.05%
Gold-GC=F	$4,323.90	$4,622.40	$4,726.60	2.25%	9.31%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Employment exceeded expectations in April after edging up 115,000. The total number of employed ticked down by 226,000 to 162.6 million last month. The unemployment rate remained at 4.3%. Both the employment-population ratio and the labor force participation rate dipped 0.1 percentage point to 59.1% and 61.8%, respectively. The number of unemployed rose by 134,000 to 7.4 million. The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.8 million and accounted for 25.3% of all unemployed people. In April, average hourly earnings rose by $0.06, or 0.2%, to $37.41. Over the year, average hourly earnings have increased by 3.6%. The average workweek edged up by 0.1 hour to 34.3 hours in April.
• The number of job openings, at 6.9 million, was essentially unchanged in March from the previous month, according to the most recent Job Openings and Labor Turnover Summary. The number of hires increased 655,000 to 5.6 million in March, while the number of total separations rose 356,000 to 5.4 million.
• According to the latest report from the Census Bureau, sales of new single-family homes rose 7.4% in March and were 3.3% above the March 2025 estimate. Inventory of new single-family homes for sale, at 8.5 months, fell 6.6% in March from the previous month. The median sales price of new houses sold in March was $387,400. This was 5.3% below the February price of $409,000 and was 6.2% less than the March 2025 price of $412,900. The average sales price of new houses sold in March was $503,100. This was 3.4% below the February price of $521,000 and was 1.2% under the March 2025 price of $509,200.
• The goods and services trade deficit was $60.3 billion in March, 4.4% above the February estimate but 55.6% less than the deficit from a year ago. In March, exports increased 2.0% and imports rose 2.3%. Year to date, exports increased 12.0%, while imports fell 9.1%.
• Business activity in the services sector ticked up marginally in April, according to the latest report from The S&P Global. US Services PMI® Business Activity Index registered 51.0 last month, up slightly from the March reading of 49.8. According to survey respondents, new work orders declined for the first time since April 2024 amid the negative impact of the war in the Middle East and higher inflationary pressures. Higher prices for goods and services, most notably fuel and gas, plus increased labor-related costs continued to drive typical operating expenses up, which contributed to another steep rise in selling prices.
• For the week ended May 2, there were 200,000 new claims for unemployment insurance, an increase of 10,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended April 25 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended April 25 was 1,766,000, a decrease of 10,000 from the previous week’s level, which was revised down by 9,000. States and territories with the highest insured unemployment rates for the week ended April 18 were New Jersey (2.3%), Washington (2.2%), Massachusetts (2.1%), California (2.0%), Rhode Island (2.0%), Oregon (1.8%), Minnesota (1.7%), New York (1.7%), Illinois (1.6%), Nevada (1.6%), and Puerto Rico (1.6%). The largest increases in initial claims for unemployment insurance for the week ended April 25 were in Rhode Island (+2,037), Arkansas (+1,137), Vermont (+348), Massachusetts (+341), and Mississippi (+269), while the largest decreases were in New York (-10,952), California (-4,677), Connecticut (-2,276), South Carolina (-1,906), and Kentucky (-1,416).
• The national average retail price for regular gasoline was $4.452 per gallon on May 4, $0.329 per gallon above the prior week’s price and $1.305 per gallon higher than a year ago. Also, as of May 4, the East Coast price increased $0.293 to $4.251 per gallon; the Midwest price rose $0.515 to $4.399 per gallon; the Gulf Coast price advanced $0.227 to $3.902 per gallon; the Rocky Mountain price increased $0.343 to $4.359 per gallon; and the West Coast price increased $0.171 to $5.583 per gallon.

Eye on the Week Ahead

Much of the economic data released this week is focused on inflation. The Consumer Price Index and the Producer Price Index, both for April, are out this week. Consumer prices rose 0.9% in March as price pressures seem to be trending higher.

Overview

The year 2025 was extraordinary for the economy and the markets. Sweeping tariffs, a cooling labor market, rising consumer prices, a prolonged U.S. federal government shutdown, turmoil in the Middle East, and the ongoing Russia/Ukraine war were some of the many factors that should have signaled economic contraction and a downturn in the stock market. Yet, the opposite occurred. Gross domestic product expanded, largely driven by strong consumer spending. Each of the major stock market indexes listed here posted solid year-end gains. Corporate profits and earnings grew, despite the unemployment rate increasing to its highest level since September 2021. Throughout the year, there were several major events that impacted the stock market and the economy.

The year began rather benignly until April, when President Trump rolled out a fresh round of tariffs across a wide range of imported goods. Unsuspecting investors were shaken, worried about a possible recession and rising inflation. The immediate response was a major move away from equities, causing a spike in volatility. In addition to a plunge in stock prices, the value of the U.S. dollar fell, while U.S. government Treasuries, normally viewed as a safe haven, also saw a selloff, pulling bond prices lower, while pushing yields higher. Over the course of the next several months, new trade agreements prompted a reduction in some tariff rates on certain imports, helping to calm investors’ concerns. Nevertheless, despite geopolitical headwinds and valuation concerns, equities delivered a robust year, largely fueled by the continued artificial intelligence boom and a resilient consumer.

The “Department of Government Efficiency” (DOGE), led by Elon Musk, implemented aggressive spending cuts and federal workforce reductions. While proponents cited long-term savings, the immediate impact included disruptions to government services and a government shutdown in October.

Consumer prices remained stubbornly elevated for much of the year. Inflation, as measured by the Consumer Price Index (CPI), stayed “sticky,” hovering around 3.0%-3.1%, well above the Fed’s 2.0% target. This persistence was attributed partly to new universal import tariffs and trade disputes that raised costs for goods. In 2025, prices for food rose 2.6%, while shelter prices rose 3.0%. Prices at the wholesale level rose 2.7% for the year, which included a 4.0% rise in prices for food and a 3.8% jump in energy prices.

The economy grew in 2025, despite early-year volatility and aggressive trade policy shifts. Gross domestic product expanded by approximately 1.8% to 2.0% for the full year. Growth was uneven; after a sluggish start in the first quarter, activity accelerated significantly in the third quarter, reaching a robust 4.3% annualized rate of growth before moderating again in quarter four. Consumer spending remained the primary engine of economic growth but became increasingly reliant on higher-income households. Business investment, particularly in artificial intelligence (AI) and software, provided a critical tailwind, offsetting weakness in manufacturing and housing.

According to FactSet, S&P 500 companies were projected to report earnings growth of approximately 12.1%-12.3% for 2025. This performance is well above the 10-year average of 8.6%. Corporate revenues for the year grew by approximately 6.9% to 7.0%, also surpassing the 10-year average of roughly 5.3%. The estimated net profit margin, at 12.9%-13.0%, would mark the highest annual net profit margin since FactSet began tracking the metric in 2008.

The housing sector remained relatively cool for much of the year. While mortgage rates began to recede late in the year due to Fed interest rate cuts, high prices and low inventory kept sale volumes low. Mortgage rates eased in the second half of the year after peaking at just over 7.0% in January, falling to a low of about 6.12% in October before settling at about 6.15% at the end of the year.

A distinct shift in 2025 was the softening of the labor market. The unemployment rate ticked up steadily throughout the year, starting near 4.1% and ending at approximately 4.6% in November, the highest level in four years. The rate of new hires decelerated throughout much of the year. While layoffs remained relatively low historically, the “hiring rate” plummeted. Companies became hesitant to backfill roles due to policy uncertainty and AI integration, making it harder for new entrants and the unemployed to find work. Wage gains moderated to roughly 3.5%, in line with long-term averages but lagging somewhat behind the perceived cost of living for many workers.

Overall industrial production ended the year with a gain of about 2.5%. Mining and utilities bounced up and down throughout the year, while manufacturing fought to keep from contracting, influenced by renewed trade tariffs, policy uncertainty, and the protracted government shutdown.

Market/Index	2024 Close	As of 9/30	2025 Close	Month Change	Q4 Change	2025 Change
DJIA	42,544.22	46,397.89	48,063.29	0.73%	3.59%	12.97%
Nasdaq	19,310.79	22,660.01	23,241.99	-0.53%	2.57%	20.36%
S&P 500	5,881.63	6,688.46	6,845.50	-0.05%	2.35%	16.39%
Russell 2000	2,230.16	2,436.48	2,481.91	-0.68%	1.86%	11.29%
Global Dow	4,863.01	5,917.39	6,169.34	1.81%	4.26%	26.86%
fed. funds target rate	4.25%-4.50%	4.00%-4.25%	3.50%-3.75%	-25 bps	-50 bps	-75 bps
10-year Treasuries	4.57%	4.14%	4.16%	14 bps	2 bps	-41 bps
US Dollar-DXY	108.44	97.82	98.26	-1.22%	0.45%	-9.39%
Crude Oil-CL=F	$71.76	$62.51	$57.46	-3.38%	-8.08%	-19.93%
Gold-GC=F	$2,638.50	$3,882.60	$4,323.90	1.74%	11.37%	63.88%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Snapshot 2025

The Markets

• Equities: Despite early-year volatility driven by trade policy uncertainties, 2025 proved to be a strong year for U.S. equities, with the major indexes (the Dow, the S&P 500, and the NASDAQ) delivering solid annual returns. The market’s resilience was supported by solid corporate profitability, a pivot in Federal Reserve monetary policy, and a stabilization of trade relations after a rocky second quarter. Among the major U.S. market indexes, the NASDAQ outperformed, driven by continued strength in AI and tech giants. The S&P 500 notched its eighth straight monthly gain in December, largely influenced by corporate profit growth. The Dow recovered from a deep dive in April to end the year on an upward trend. U.S. small caps, as measured by the Russell 2000, had a decent but choppy year. While a nearly 11.0% annual return was historically solid, it lagged behind the three major U.S. indexes. On the other hand, 2025 was a banner year for global blue chips. After years of U.S. tech dominance, non-U.S. markets (particularly in Europe and parts of Asia) rallied. The Global Dow, which tracks 150 leading companies from around the world, significantly outperformed the major U.S. market indexes. The Global Dow saw consistent growth through Q2 and Q3, accelerating in Q4 to finish 2025 near record highs.
• Bonds: After years of historic volatility, 2025 offered fixed income investors a “solid” year. While bonds did not match the double-digit rallies seen in equities, they fulfilled their traditional role of providing income and stability, with most core indices finishing firmly in the green. The 2025 U.S. Treasury bond market, however, was defined by significant volatility influenced by new economic legislation, persistent inflation, a shift in fiscal policy expectations, and the conclusion of the Federal Reserve’s restrictive interest rate cycle. The 10-year Treasury yield, which began the year at 4.57%, ended the year around 4.16%. Meanwhile, the two-year yield fell more aggressively to approximately 3.46%, reflecting the Fed’s rate cuts.
• Oil: In 2025, the crude oil market was defined by a steady downward trend, ending the year at some of its lowest levels since the COVID-19 pandemic. Despite temporary surges driven by geopolitical tensions in Ukraine and the Middle East, a combination of record-breaking U.S. crude production and cooling global demand, particularly from China, led to a cumulative price decline of approximately 20.0% over the year.
• Prices at the pump trended higher for the first half of the year, only to decline throughout the remainder of the year. Prices largely responded to changes in global economics, supply and demand, and other extraordinary factors attributable to the unrest in the Middle East. The average retail price for a gallon of regular gasoline was $3.047 at the beginning of the year. By the end of June, the price had risen to $3.213 per gallon, then steadily declined for the remainder of the year, closing with an average price of $2.811 on December 29.
• FOMC/interest rates: The Federal Open Market Committee (FOMC) navigated a complex year defined by “stubborn” inflation, a cooling labor market, and significant geopolitical shifts, including the impact of new trade tariffs. After a period of holding rates steady in the first half of the year, the Fed shifted to a series of 25-basis-point rate cuts starting in September through December, which brought the federal funds target rate range down 75 basis points to 3.50%-3.75%. This brought borrowing costs to their lowest level since 2022. The FOMC is entering 2026 with a cautious stance. Their updated projections suggest only one additional 25-basis-point rate cut for the entirety of 2026.
• US Dollar-DXY: The U.S. dollar experienced its most challenging year in decades, ending a long period of dominance with a significant annual decline. After starting the year at historic highs, the U.S. Dollar Index (DXY) fell by more than 9.0% over the course of the year, marking its steepest drop since 2017. The dollar’s downturn was driven by a combination of fiscal, political, and technical factors, including broad-based tariffs and fiscal concerns that led to the downgrading of the U.S. long-term sovereign credit rating.
• Gold: Gold enjoyed a record-breaking year, characterized by an unprecedented rally that saw the precious metal surge nearly 70.0%, its strongest annual gain in over 40 years. Prices rose from roughly $2,600 at the start of the year to an all-time high of over $4,500 per ounce before settling at around $4,324.00.

Last Month’s Economic News

• The following section contains a review of the latest economic data available as of December 31, 2025.

• Employment: Job growth was little changed in November, with the addition of 64,000 new jobs and has shown little change since April. Employment in August was revised down by 22,000, from -4,000 to -26,000, and the change for September was revised down by 11,000, from +119,000 to +108,000. With these revisions, employment in August and September combined was 33,000 lower than previously reported. The unemployment rate was 4.6% in November, 0.2 percentage point higher than the September rate and 0.4 percentage point above the November 2024 estimate. The number of unemployed persons in November, at 7.8 million, edged up 228,000 from September and 710,000 from November 2024. The number of long-term unemployed (those jobless for 27 weeks or more) changed minimally at 1.9 million from September and accounted for 24.3% of all unemployed persons. The total number of long-term unemployed was 256,000 above the estimate from a year earlier. The labor force participation rate inched up 0.1 percentage point to 62.5% in November from September and was unchanged from last November. The employment-population ratio in November, at 59.6%, increased 0.1 percentage point from September and 0.2 percentage point from November 2024 (59.8%). In November, average hourly earnings increased by $0.05 to $36.86. Over the past 12 months ended in November, average hourly earnings rose by 3.5%. The average workweek increased by 0.1 hour to 34.3 hours in November, the same as in November 2024.
• There were 199,000 initial claims for unemployment insurance for the week ended December 27, 2025. During the same period, the total number of workers receiving unemployment insurance was 1,866,000. The insured unemployment rate was 1.2%, the same rate as a year earlier. There were 209,000 initial claims a year ago, while the total number of workers receiving unemployment insurance was 1,828,000.
• FOMC/interest rates: As expected, the Federal Open Market Committee reduced the target range for the federal funds rate by 25.0 basis points to the current 3.50%-3.75% following its meeting in December. In arriving at its decision, the Committee noted that economic activity continued to expand at a moderate pace, job gains have slowed, the unemployment rate increased, while inflation moved up since earlier in the year and remained somewhat elevated. As to future policy actions, the FOMC stated that “In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.” As to projections for future rate adjustments, the FOMC estimates very gradual declines in the fed funds target rate range over the next few years.
• GDP/budget: The economy, as measured by gross domestic product, accelerated at an annualized rate of 4.3% in the third quarter, following an increase of 3.8% in the second quarter. A year ago, GDP expanded at an annualized rate of 3.3% in the third quarter. Consumer spending, as measured by the personal consumption expenditures index, rose 3.5% in the third quarter, higher than in the second quarter (2.5%) but below the 2024 pace of 3.9%. Spending on services rose 3.7% in the third quarter, compared with a 2.6% increase in the second quarter. Consumer spending on goods increased 3.1% in the third quarter (2.2% in the second quarter). Fixed investment advanced 1.0% in the third quarter (4.4% in the second quarter). Nonresidential (business) fixed investment rose 2.8% in the third quarter compared to a 7.3% increase in the second quarter. Residential fixed investment declined 5.1% in the third quarter, unchanged from the second quarter. Exports rose 8.8% in the third quarter, compared with a 1.8% decrease in the previous quarter. Imports, which are a negative in the calculation of GDP, declined 4.7% in the third quarter after falling 29.3% in the second quarter. Consumer prices increased 2.8% in the third quarter (2.1% in the second quarter). Excluding food and energy, consumer prices advanced 2.9% in the third quarter (2.6% in the second quarter).
• November 2025 saw the federal budget deficit come in at $173 billion, roughly $194 billion less than the deficit of $367 billion from a year earlier. The deficit for the first two months of fiscal year 2026, at $458 billion, is $166 billion lower than the first two months of the previous fiscal year. For fiscal year 2025, which ended September 2025, the government deficit was $1,775 billion, which was $42 billion below the government deficit for fiscal year 2024 ($1,817 billion). For fiscal year 2025, government outlays increased $275 billion, while government receipts increased $317 billion. Compared to the previous fiscal year, individual income tax receipts rose by roughly $250 billion in fiscal year 2025, and corporate income tax receipts decreased by $78 billion.
• Inflation/consumer spending: According to the latest Personal Income and Outlays report, personal income rose 0.4% in September and disposable (after-tax) personal income advanced 0.3%. Consumer spending increased 0.3% in September, unchanged from the previous month. In September, the Personal Consumption Expenditures (PCE) price index rose 0.3% after increasing 0.2% in August. Core prices advanced 0.2% in September, unchanged from the August estimate. The PCE price index rose 3.0% since September 2024, while core prices also rose 3.0% over the same period.
• The Consumer Price Index rose 0.2% in November over the two months from September 2025 to November 2025. Over the 12 months ended in November, the CPI rose 2.7% after rising 3.0% over the 12 months ended in September. Core prices rose 0.2% in November and 2.6% since November 2024. Prices less food and energy rose 2.6% over the last 12 months. Energy prices increased 4.2% for the 12 months ended in November. Prices for food increased 2.6% over the last year. The Bureau of Labor Statistics did not collect survey data for October 2025 due to a lapse in appropriations.
• The latest data reveals that the Producer Price Index increased 0.3% in September after declining 0.1% in August. Producer prices increased 2.7% for the 12 months ended in September, the same 12-month increase for the period ended in August. Excluding food and energy, producer prices ticked up 0.1% in September and 2.6% for the year. In September, prices for goods increased 0.9% from the previous month and 3.3% since September 2024. Last month, prices for services were unchanged but rose 2.5% for the 12 months ended in September.
• Housing: Sales of existing homes increased 0.5% in November but were down 1.0% from November 2024. The median existing home price was $409,200 in November, lower than the October price of $414,900 but 1.2% higher than the November 2024 price of $404,400. Unsold inventory of existing homes represented a 4.2-month supply at the current sales pace, down from October (4.4 months) but above the 3.8-month supply in November 2024. Sales of existing single-family homes increased 0.8% in November. Over the 12 months ended in November, sales of existing single-family homes declined 0.8%. The median existing single-family home price was $413,300 in November, down from $420,200 in October but 1.2% above the November 2024 price of $409,200.
• Sales of new single-family homes jumped higher in August, exceeding expectations, although the inventory of available new homes for sale plunged lower from the previous month. Sales of new single-family homes rose 20.5% in August and were 15.4% above the August 2024 figure. The median sales price of new single-family houses sold in August was $413,500 ($395,100 in July), which was higher than the August 2024 estimate of $405,800. The August average sales price was $534,100 ($478,200 in July), up from the August 2024 average sales price of $475,600. Inventory of new single-family homes for sale in August represented a supply of 7.4 months at the current sales pace, 17.8% below the July estimate of 9.0 months and 9.8% below the August 2024 estimate of 8.2 months.
• Manufacturing: Industrial production (IP) rose 0.2% in November after ticking down 0.1% in October. On average, IP rose 0.1% per month across October and November, the same as the rate of increase in September but a somewhat slower average pace than the past 12 months. Manufacturing output was flat in November after dropping 0.4% in October. There were swings in both mining and utilities output over October and November, though, on net, both sectors posted gains. Mining dipped 0.8% in October but rose 1.7% in November. Utilities fell 0.4% in November after climbing 2.6% in October. IP in November was 2.5% above its year-earlier level.
• New orders for durable goods in October, down following two consecutive monthly increases, fell 2.2%. This followed a 0.7% September increase. Excluding transportation, new orders increased 0.2%. Excluding defense, new orders decreased 1.5%. Transportation equipment, down 6.5%, drove the October decline following two consecutive monthly increases.
• Imports and exports: Import prices were unchanged in September after ticking up 0.1% in August. Higher prices for nonfuel imports (+0.2%) offset lower prices for fuel imports (-1.5%) in September. Prices for U.S. imports rose 0.3% from September 2024 to September 2025. The September increase was the first 12-month advance since the prices rose 0.8% for the year ended March 2025. Prices for U.S. exports were unchanged in September after rising 0.1% the previous month. U.S. export prices increased 3.8% over the 12-month period ended in September, the largest such advance since the prices rose 4.6% for the year ended December 2022.
• The international trade in goods deficit for August was $85.5 billion, 16.8% under the July estimate. Exports of goods for August dipped 1.3%, while imports of goods declined 7.0%. Over the 12 months ended in August, exports decreased 0.4% and imports fell 4.1%.
• The latest information on international trade in goods and services, released December 11, was for September and revealed that the goods and services trade deficit was $52.8 billion, a decrease of $6.4 billion, or 10.9%, from the August deficit. September exports were $289.3 billion, $8.4 billion, or 3.0% more than August exports. September imports were $342.1 billion, $1.9 billion, or 0.6% above the August estimate. Year to date, the goods and services deficit increased $112.6 billion, or 17.2%, from the same period in 2024. Exports increased $125.1 billion, or 5.2%. Imports increased $237.7 billion, or 7.7%.
• International markets: In December 2025, European and Asian stock markets both capped off a strong year with record-breaking performances, though the month began with cautious trading and a brief correction. By the end of the year, the rally was revitalized by a U.S. Federal Reserve interest rate cut and continued optimism surrounding artificial intelligence. For 2025, the STOXX Europe 600 Index rose 19.0%; the United Kingdom’s FTSE advanced 20.53%; Japan’s Nikkei 225 Index gained 26.18%; and China’s Shanghai Composite Index increased 18.41%.
• Consumer confidence: December saw consumer confidence wane, ending the year on a down note. The Conference Board Consumer Confidence Index® decreased in December to 89.1 from 92.9 in November. The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, fell 9.5 points to 116.8 in December. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, held steady at 70.7 in December but has tracked under 80.0 for 11 consecutive months, running below the threshold of 80.0 that usually signals a recession ahead.

Eye on the Year Ahead

Looking toward to 2026, persistent inflation and a cooling labor market remain key concerns. Potential tax cuts and investment in AI could offer a balance against higher tariffs, rising prices, and a stagnant labor market.

The Markets (as of market close December 12, 2025)

Wall Street experienced a mixed week highlighted by the Federal Reserve’s policy decision (see below) and a retreat from technology shares. Illustrative of the week’s volatility, the Dow and the S&P 500 reached record highs mid-week following the Fed’s latest rate cut, before retreating at the end of the week. Despite a negative close last Friday, the Dow, the Global Dow, and the Russell 2000 ended the week higher, while the NASDAQ and the S&P 500 finished the week in the red. Investors moved out of technology and AI stocks and into more cyclical shares like financials, materials, and small-cap stocks. Treasury yields, which move inversely to bond prices, were mixed for the most part, ultimately trending upward by week’s end. The Fed’s overall sentiment that the economy, particularly the labor market, should hold up in 2026 reduced the demand for long-term bonds. Ongoing expectations of a global surplus pulled crude oil prices lower again last week.

Stock Market Indexes

Market/Index	2024 Close	Prior Week	As of 12/12	Weekly Change	YTD Change
DJIA	42,544.22	47,954.99	48,458.05	1.05%	13.90%
NASDAQ	19,310.79	23,578.13	23,195.17	-1.62%	20.12%
S&P 500	5,881.63	6,870.40	6,827.41	-0.63%	16.08%
Russell 2000	2,230.16	2,521.48	2,551.46	1.19%	14.41%
Global Dow	4,863.01	6,089.50	6,139.98	0.83%	26.26%
fed. funds target rate	4.25%-4.50%	3.75%-4.00%	3.50%-3.75%	-25 bps	-75 bps
10-year Treasuries	4.57%	4.13%	4.19%	6 bps	-38 bps
US Dollar-DXY	108.44	98.99	98.40	-0.60%	-9.26%
Crude Oil-CL=F	$71.76	$60.17	$57.46	-4.50%	-19.93%
Gold-GC=F	$2,638.50	$4,225.50	$4,333.70	2.56%	64.25%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• The Federal Reserve cut the target range for the federal funds rate by 25 basis points to 3.50%-3.75% following its December meeting. The latest reduction was in line with expectations and followed similar reductions in September and October. This most recent reduction brings the target rate range to its lowest level since 2022. The decision to reduce interest rates was not unanimous, with two members voting to maintain the current range, while a third member voted for a 50-basis-point cut. The Fed did not change its projections from September, which call for one more 25-basis-point cut in 2026. In reaching its decision, the Fed noted that job gains had slowed, while inflation moved up since earlier in the year and remained somewhat elevated.
• The Treasury deficit for November was $173 billion, $111 billion less than the October deficit. November receipts were $336 billion, while outlays totaled $509 billion. In November, individual income tax receipts ($147 billion) were the largest contributor to total monthly receipts, while Social Security payments ($134 billion) were the largest outlay. Through the first two months of the fiscal year, the total deficit sat at $458 billion, about $167 billion less than the comparable period in the previous fiscal year.
• According to the latest Job Openings and Labor Turnover Summary, the number of job openings was unchanged at 7.7 million in October from the previous month. The total number of hires slipped by 218,000 to 5.1 million. Total separations, at 5.1 million, declined 214,000 in October.
• The international trade in goods and services deficit fell 10.9% to $52.8 billion in September, according to the latest information from the Bureau of Economic Analysis. Exports rose 3.0% to $289.3 billion, while imports increased 0.6% to $342.1 billion. Year to date, the goods and services deficit increased $112.6 billion, or 17.2%, from the same period in 2024. Exports increased $125.1 billion, or 5.2%. Imports increased $237.7 billion, or 7.7%.
• For the week ended December 6, there were 236,000 new claims for unemployment insurance, an increase of 44,000 from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 29 was 1.2%, 0.1 percentage point lower than the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended November 29 was 1,838,000, a decrease of 99,000 from the previous week’s level, which was revised down by 2,000. States and territories with the highest insured unemployment rates for the week ended November 22 were New Jersey (2.2%), Washington (2.2%), Massachusetts (1.9%), Alaska (1.8%), Connecticut (1.8%), Nevada (1.8%), Puerto Rico (1.8%), Rhode Island (1.8%), California (1.7%), and Oregon (1.7%). The largest increases in initial claims for unemployment insurance for the week ended November 29 were in Pennsylvania (+2,208), Wisconsin (+1,092), Nebraska (+870), Iowa (+605), and Ohio (+493), while the largest decreases were in California (-19,844), Texas (-7,836), New York (-3,453), Illinois (-2,216), and Florida (-2,185).
• The national average retail price for regular gasoline was $2.940 per gallon on December 8, $0.045 per gallon below the prior week’s price and $0.068 per gallon less than a year ago. Also, as of December 8, the East Coast price decreased $0.039 to $2.892 per gallon; the Midwest price fell $0.020 to $2.720 per gallon; the Gulf Coast price dropped $0.058 to $2.493 per gallon; the Rocky Mountain price declined $0.139 to $2.644 per gallon; and the West Coast price fell $0.075 to $3.956 per gallon.

Eye on the Week Ahead

There’s plenty of important economic data released this week as various government agencies try to catch up following the reopening of the Federal government. Of particular interest this week is the latest jobs report and the release of the Consumer Price Index.