It’s already November and markets have had another terrific year. But while investors are doing great, overall sentiment seems to be saying the opposite. Negative news stories abound, pointing to tariffs, a possible stock market bubble, the government shutdown or the deficit as potential catalysts for the next crash. More than half the country – 53% – seems to agree with the news, believing the economy to be worsening, according to the latest survey conducted by Harris.

Because the media tends to lean into our human bias to pay more attention to negative information, we don’t always hear about some of the positive aspects of our economy and why markets act as they do.

The reality is nuanced. The economy grew strongly in 2023 and 2024. This year, growth has slowed down, which likely accounts for the feelings that things have turned negative. However, slower growth is different than shrinking. We would therefore not describe the overall situation as flashing red right now as many fear. Yellow would be a more accurate description.

At Longwave, every day we receive economic data and opinions from dozens of sources. While it’s impossible to say what will happen in a year or even six months, at least for the time being the economy is still expanding. In this time when uncertainty seems to be dialed up to 11, we just want to make sure you are also hearing about some of the positive data, just as we do.

1. Unemployment Remains Near Historic Lows

Unemployment has seen an uptick, with the latest reading at around 4.3%. This is still considered a healthy rate of unemployment. Americans are retaining their jobs in a relatively tight labor market.[i]

2. Consumer Spending Remains Strong

Despite concerns about a recession and higher costs, consumers continue to spend on goods and services, which account for about 70% of economic activity. The rate of spending has increased throughout the summer.[ii]

3. Small Business Formation is Thriving

Americans filed a record number of new business applications in recent years suggesting overall business and economic confidence.

4. Energy Independence Has Strengthened

The U.S. is now a net energy exporter, reducing vulnerability to global supply shocks and keeping domestic energy costs more stable, although still elevated due to demand.[iii] Despite push back from the current administration, 90% of all new energy put on the grid in 2024 was renewable and over 90% of current energy projects underway remain renewable.[iv]

5. Inflation Has Cooled Significantly

While inflation at 3% is above the Federal Reserve's target of 2%, it has remained relatively sticky at that level despite tariffs.[v]

6. Corporate Earnings Have Been Solid

Many companies continue to report strong profits, which supports stock valuations and provides a foundation for market growth. According to the London Stock Exchange Group, large U.S. companies are still growing their earnings at a 9% clip while small companies are growing at double that in 2025. Earnings are also estimated to remain strong in 2026. Earnings are generally considered the greatest predictor for market performance.[vi][vii]

S&P 500®earnings estimates going forward continue to be strong

Source: FactSet

7. Stock Market May Not be in a Bubble

Because stocks have gone up double digits each of the past 3 years, it’s popular to say the market is in a bubble. While some stocks do seem to be expensive by historical standards, these tend to be companies with historically very high profit margins and earnings. It’s possible the market will experience a pullback, but it’s just as possible this upswing continues.

8. Real Estate Values are Stable

While some markets have seen small declines in home values, and affordability continues to be an issue, nationally, the real estate market has been stable to rising. The U.S. National Home Price Index has increased throughout the rate cycle of the past few years, hitting a high in 2025.[viii] With interest rates now coming down, there is also again a possibility for affordability to ease in residential housing and a rebound in the commercial space.

The Real Cost of Negativity Bias

The negative news bias is not innocuous. It can have real consequences for both mood and behavior. Making poor financial decisions based on news stories can cause long-lasting financial harm. It’s not uncommon to hear investors make drastic, irrevocable decisions during periods of media-driven anxiety: requesting pension benefits early (permanently reducing lifetime income), selling investments at market lows (locking in losses and missing the recovery), or moving entirely to cash (guaranteeing the erosion of purchasing power over time).

These decisions, often made in response to alarming headlines rather than personal financial circumstances or historical wisdom, can derail otherwise well laid plans.

Focus on Your Plan, Not the News

Your financial plan was built to weather uncertainty It accounts for market volatility, economic cycles, and the unexpected. Stay focused on your long-term goals and tune out the noise designed to trigger emotional reactions.

If you're feeling anxious about your finances or the economy, please reach out. Let's review your specific situation together; that's what we're here for.

As always, we're grateful for your trust and confidence.

Sources:

[i] U.S. Bureau of Labor Statistics, “Civilian unemployment rate”, 2025

[ii] U.S. Bureau of Economic Activity, “Consumer Spending”, 2025

[iii] U.S. Energy Information Agency, “U.S. energy facts explained”, 2023

[iv] Renewable Energy Institute, “Renewables Account for 90% of US Power Generation in 2024”, 2024

[v] U.S. Bureau of Labor Statistics, “Consumer Price Index Summary”, 2025

[vi] London Stock Exchange Group, FTSE Russell, “Russell US Indexes Spotlight”, 2025

[vii] London Stock Exchange Group, FTSE Russell, “S&P 500 Earnings Dashboard 25Q3 | October. 21, 2025”, 2025

[viii] St. Louis Federal Reserve, “S&P CoreLogic Case-Shiller U.S. National Home Price Index”, 2025

The Economy is “OK” …and That Might be OK