Fourth Quarter 2025 Review

As the new year begins, the U.S. economy appears to be on firmer footing than many expected through much of 2025.

Growth finished the year with steady support from consumer spending, improving productivity, and corporate earnings that continued to come in ahead of expectations—even as job growth cooled and sentiment remained cautious. Inflation also showed signs of easing, giving the Federal Reserve room to pivot toward a more accommodative stance and helping improve financial conditions heading into 2026.

Our Fourth Quarter 2025 Review examines what’s driving that resilience, including the durability of earnings, the implications of shifting monetary policy, and early signs of a productivity uptrend. We also note where uncertainty remains—particularly around valuations, market concentration, and the pace of economic moderation—and place those concerns in historical context to help separate signal from noise.