The global economy demonstrated remarkable resilience throughout 2025, with markets reaching new heights despite ongoing trade tensions and economic uncertainties, according to multiple economic reports released this week.
The S&P 500 rallied to a record high close on Friday, lifted primarily by Broadcom and other chipmaker stocks [Reuters]. The milestone came as investors digested a weaker-than-expected jobs report that reinforced expectations for Federal Reserve interest rate cuts.
Economic Growth Patterns Emerge
European Central Bank President Christine Lagarde highlighted the economy's strength during a recent press conference, noting that "the economy has been resilient" with healthy growth in consumer spending, business investment, and exports [Deloitte]. Growth was primarily driven by services, "especially in the information and communications sectors," while industry and construction "remained flat."
The labor market showed mixed signals. Lagarde described it as "robust" but noted that job vacancy rates have fallen to their lowest levels since the pandemic, suggesting reduced wage pressure that could benefit inflation control [Deloitte].
Employment Data Raises Fed Rate Cut Expectations
Private sector employment data revealed concerning trends, with ADP reporting a 32,000 job decline from October to November 2025—the largest drop since March 2023 [Deloitte]. The report indicated that private sector employment fell in four of the last six months, prompting investors to increase their expectations for a December rate cut from 88% to 89%.
Official employment data showed the U.S. added 64,000 jobs in November, while the unemployment rate increased slightly [J.P. Morgan]. This weaker job growth supported the case for continued Federal Reserve easing despite elevated inflation levels.
Inflation Shows Moderation
In a positive development for monetary policy, consumer prices rose more slowly than expected in November, bringing annual headline inflation to 2.7% [J.P. Morgan]. This moderation provided the Fed additional flexibility in its monetary policy decisions.
Trade Tensions Remain Challenge
Despite overall resilience, trade tensions continue to pose risks to global growth. Lagarde warned that trade disputes will likely "remain a drag on growth" in the coming year [Deloitte]. Economic activity in 2025 proved more volatile than anticipated, with tariff announcements and government shutdown concerns driving uncertainty throughout the year [J.P. Morgan].
However, resilient consumer spending and significant AI-infrastructure capital investments supported GDP growth of 1.8% for the year, helping offset trade-related headwinds [J.P. Morgan].
Looking Ahead
Analysts suggest the bull market is likely to persist into 2026, despite lingering uncertainties around consumer behavior, artificial intelligence investments, and global trade dynamics. The Federal Reserve's easing cycle, which resumed in fall 2025, is expected to continue based on labor market softness and stable pricing trends.
Government investment in infrastructure and defense is projected to boost growth, though the persistence of trade tensions may continue to weigh on economic expansion [Deloitte]. Market observers note that recession risks have abated for now, with economic fundamentals appearing supportive of continued growth amid intermittent volatility.