In December, the US economy created a lackluster 50,000 jobs. When comparing this gain to other year-end performances in the past few decades, it is among the weakest we’ve ever seen. Even with an extraordinary rebound in the stock market over the course of 2025, the labor market has exposed the cracks underneath. As the year wound down, year-ahead job-finding expectations plunged to record lows. That’s the key lesson from an experiment recently fielded by the New York Federal Reserve. This official decline has led to increased justifiable concerns over the fragility of the economy and stress over the financial health of its residents.
Yes, the stock market was on IR in 2025. Those stocks led the over 40-day average of the S&P 500 index trading above its moving average for the last 125 days. This positive momentum could not be farther from the truth of labor market realities. The total jobs US employers have open plummeted to an over one-year low. This steep drop further highlights the disconnect between the growing prosperity of Wall Street and the lack of good jobs on Main Street.
Furthermore, the trend popularly referred to as a K-shaped economy became more pronounced through 2025. We traditional economic model that more accurately reflects a growing reality where different parts of our population – rural areas, cities, people of color, etc. While some Americans benefited substantially from rising stock prices, many others found themselves struggling with escalating housing and childcare costs. Despite incomes rising over those years, this gap has resulted in even the highest paid workers feeling financially pinched.
The issue is compounded by concerns over the broader economy. The irony is, people making six-figure incomes are frequently cash-strapped. That’s particularly true for people living in cities, where the concentrated cost of living is high. The New York Fed business outlook survey seems to confirm this remarkable sentiment. It signals that job-finding expectations have reached a record low, indicative of the profound lack of confidence in anticipated job prospects.
8 US stocks lagged their international counterparts over 2025 further complicating the economic picture. As global equities outperformed, investors are seeking growth outside domestic markets. This disconnect between domestic and international market trends will likely lead many US investors to reconsider their investment approaches.
Market analysts have had a close eye on risk levels as stocks, by their nature, are generally riskier than bonds. The Fear & Greed Index gauges investor sentiment with seven underlying market indicators. This index serves as a more accurate leading indicator for short-term market activity. Each indicator is given an equal weighting to calculate a score out of 100. A score of 100 means extreme greediness, and a score of 0 means extreme fear.
The index is designed to measure the strength of stock price strength, market momentum and safe-haven demand. As investors navigate through fluctuating economic conditions, this index can provide valuable insights into market psychology and potential shifts in investment behavior.