The US economy presents a complex picture
In 2025, the US government will make every effort to promote conservative economic policies and nationalist trade protectionism policies. Internally, we implement the concept of "small government" governance, firmly believe in trickle down economics, and take measures such as large-scale tax cuts, streamlining government agencies, reducing federal agency spending, and correcting the social security policies implemented by the Democratic Party. Externally, ignoring existing international trade rules, striving to construct a new pattern of international trade, economy, and security that is more favorable to the United States. On April 2nd, the US government announced the imposition of so-called "equivalent tariffs" on various countries, causing fluctuations in global trade and investment markets, causing significant impacts on the global economic and trade system and international economic order, and also having far-reaching effects on its own economy.
In 2025, the US economy presents a complex picture, with prominent features including low to high economic growth, overall decline in inflation, cooling employment, and a shift towards loose policies.
Driven by factors such as strong consumer and corporate spending, the growth rate of the US Gross Domestic Product (GDP) in the first three quarters of 2025 will be -0.5%, 3.8%, and 4.3%, respectively, showing a trend of low at the beginning and high at the end. In the first quarter of this year, the decline in US GDP was mainly dragged down by import growth, a decline in consumer spending, and a decrease in government spending. The subsequent acceleration in growth is mainly driven by investment in artificial intelligence (AI) and consumption, but the momentum is insufficient and sustainability is questionable. The proportion of personal consumption expenditure to GDP is about 70%, with a year-on-year growth of 2.9% in the first three quarters. However, the real demand indicator is weak, the marginal decline in consumer confidence, the decrease in savings rate, and the suppression of subsequent expenditures.
Technology giants represented by Apple, Microsoft, and Google have maintained a year-on-year revenue growth rate of 8% to 12% throughout the year, relying on AI big model research and development, computing power center construction, and enterprise level AI solutions. However, due to factors such as high financing costs and rising barriers to investment in AI research and development, start-up companies will see a 28% year-on-year decrease in total financing in 2025. There is a clear differentiation in layoffs within the technology industry: companies such as Meta and Amazon are expanding their AI related departments against the trend, but traditional software development and hardware manufacturing departments account for over 60% of layoffs.
Despite the US government's strong push for the return of manufacturing, the overall recovery of the US manufacturing industry is weak, with manufacturing shrinking. The estimated average Purchasing Managers' Index (PMI) for 2025 is 48.5, mostly below the boom bust line. The traditional manufacturing industry is particularly under pressure, while the automotive manufacturing industry is affected by supply chain disruptions and weak consumer demand, resulting in a year-on-year decrease of 3.2% in production for the whole year. Due to the imposition of tariffs, labor-intensive manufacturing industries such as textiles and furniture have seen an increase in raw material costs. Some companies have chosen to transfer their production capacity to regions such as Mexico and Southeast Asia to avoid cost pressures. As the "ballast stone" of the US economy, the service industry will maintain overall growth in 2025, but internal differentiation will further expand, showing a trend of "downgrading" in residents' consumption structure.
For the economic growth of the United States in 2025, there are significant differences in forecasts from different institutions. US Treasury Secretary Besson stated that the US economy is expected to grow at a rate of 3.5% by 2025, but the Congressional Budget Office has lowered its forecast for economic growth, stating that the US real GDP growth rate will be 1.4% by 2025.
In 2025, inflationary pressures in the United States will ease, with moderate growth in the overall Consumer Price Index (CPI) and core CPI. However, tariff policies will intensify price pressures, and the impact of the trade war on manufacturing investment and global supply chains will continue to emerge. Consumer confidence continues to decline, and high prices are suppressing real purchasing power. In November, the US CPI rose by 2.7% year-on-year, lower than September's 3.0% and at a lower level for the year; The core CPI also decreased, with a year-on-year increase of 2.6% in November, the lowest since the beginning of 2021.
The employment situation in the United States in 2025 is also not optimistic. As of November 2025, the unemployment rate in the United States is 4.6%, an increase from the previous period, reflecting a gradual cooling trend in the labor market. At present, the characteristic of "jobless prosperity" in the United States is evident, with many layoffs in the technology industry. The coexistence of layoffs and low wage growth, sluggish private sector employment, and widening wealth gap may further drag down consumption and trigger social and political fluctuations. Faced with weak employment and downward growth risks, since September, the Federal Reserve has ended its high interest rate cycle and turned to interest rate cuts, with a cumulative reduction of 75 basis points. The market expects further interest rate cuts in the future. As of October 2025, the US federal debt has exceeded $37.9 trillion, interest expenses have exceeded $1 trillion, and tariff revenue for the fiscal year 2025 is $194.9 billion. Debt and interest squeeze fiscal space, tariffs have limited contribution to finance, and pressure for medium - and long-term debt restructuring has increased.
In addition, the differentiation between finance and the real economy is also worth paying attention to in the US economy in 2025. The US stock market has reached a new historical high, and the profits of technology companies have increased significantly. However, a large amount of funds are trapped in the financial system, and the financing cost of the real economy is still high, putting great pressure on the operation of small and medium-sized enterprises. This also increases the uncertainty of the future prospects of the US economy.
Looking ahead to 2026, the US economic growth is expected to be driven by private consumption and AI driven corporate investment as the core dual engines, combined with fiscal policy support and some industrial structural dividends, to jointly support a growth rate of around 2.5%. AI related investment is the core engine of growth, coupled with policy dividend tracks such as new energy and semiconductors, forming a "one main, multiple auxiliary" pattern.
The tax reduction measures of the "Big and Beautiful" bill in the United States will increase more investment, at least in the short term, and have a certain effect on stimulating economic growth. The AI investment boom is on the rise and will become an important driving force for US economic growth. However, whether AI investment can be transformed into strong productivity and have a driving effect on the US economy will depend on whether investment can penetrate from tech giants to the entire industry. Currently, only about 15% of manufacturing companies and 10% of service companies are applying AI to their production processes. On the contrary, if AI applications are limited to the field of technology, its marginal impact on the economy will gradually weaken. Consumption will be an important engine of economic growth in the United States, and whether consumption can continue to grow depends on improvements in employment and income.
In 2026, US inflation is expected to show a structural decline, with core personal consumption expenditure (PCE) inflation rate below 2.5%. Energy and tariff policies may lead to a temporary rebound; The job market will show a trend of "strong blue and weak white", with strong resilience in the blue collar service industry and shrinking white-collar positions. The unemployment rate will remain around 4.5% for the whole year, and wage growth will slow down to below 3%.
Whether the US economy can demonstrate resilience in 2026 will depend on multiple factors, including tax cuts, AI adoption, consumption, debt and fiscal sustainability, the pace of Fed interest rate cuts, and the impact of trade policies on the economy. Due to the complex external environment, geopolitical conflicts driving up energy prices, slowing global demand affecting exports, and frictions between the United States and major trading partners such as Canada and Mexico, the uncertainty of US economic growth in 2026 has increased.
In addition, it is necessary to assess the potential impact of multiple risks. One reason is the weak labor market, with the unemployment rate rising to around 4.5% and wage growth slowing down to below 3%, which constrains consumption growth. Secondly, AI has a long implementation cycle and high research and development costs, and AI investment has limited short-term impact on GDP growth. The third is debt and financing costs. If the yield of 10-year US Treasury bonds exceeds 5.5%, it will push up corporate financing costs, suppress investment and consumption. By the end of 2025, the proportion of US federal debt to GDP has exceeded 130%, and interest expenses are expected to exceed $1.1 trillion by 2026, accounting for 15% of federal fiscal expenditures. If the market's confidence in the repayment ability of US debt declines, the yield of treasury bond may jump, pushing up the financing cost of enterprises and the interest rate of housing loans, which will cause a double blow to the real estate market and the real economy. The fourth is the combined impact of geopolitical conflicts and trade frictions. If the escalation of geopolitical conflicts in the Middle East leads to international oil prices exceeding $100 per barrel, the US CPI may rebound to over 3%, forcing the Federal Reserve to slow down the pace of interest rate cuts and disrupt the economic recovery process. These constraining factors may trigger a single risk outbreak or multiple risk resonance, and in extreme cases, even trigger a recession.