If you’re confused about the economy right now, you’re in good company. Experts are also grappling with conflicting indicators, imperfect data and flashing caution signs.
By some indicators, things seem to be going well. The stock market is up and rising. Unemployment – though ticking up – remains very low.
Yet by others, it could look like we’re heading for a downturn. Consumer sentiment is relatively low, consumer debt is high and stubborn inflation hasn’t budged much.
The state of the economy right now is “highly uncertain,” said Mark Gertler, economics professor at New York University. “It’s growing at a kind of modest growth rate, but there’s lots of uncertainty to play out.”
Put another way, nearly every metric economists use to determine the strength of the economy “is somewhere between moderately concerning” and “virtually stagnant,” added Ben Harris, vice president and director of Economic Studies at the Brookings Institution.
Add to that uncertainty the fact that key economic reports have been delayed or skipped over due to the record-breaking government shutdown, which ended last month.
Why does it matter that the overall picture is hazy? Complex data points make it tough for policy-makers to know the best course of action to help boost the economy, Gertler said. This is an especially complicated time for President Donald Trump’s administration, which is becoming the face of a worsening economy to many Americans. Affordability was a top issue for voters who overwhelmingly sent Democrats to power in the off-year elections in November.
Here are four important economic indicators, and what experts say they suggest about this moment.
1. The ‘no hiring, no firing’ labor landscape
The unemployment rate is still low, at around 4.4%, but has been steadily ticking up. Historically, employers need to add between 120,000 and 150,000 jobs per month to maintain a steady unemployment rate, Gertler said.
On Nov. 20, the Bureau of Labor Statistics released hiring numbers for September, delayed seven weeks due to the government shutdown. Though hiring had been weak since May, employers did pick up the pace in September, adding about 119,000 jobs.
One month doesn’t form a trend, Gertler said. A good jobs report helps make up some ground for four months of very low hiring, but overall the report was “neutral,” he said.
Right now, the labor market is in a “no hiring, no firing” position, Harris said. It’s tough to find a job if you don’t have one, but if you’re employed, you’re likely to keep that job. While that sounds stable, it’s actually a very precarious situation, he added.
“If employers start laying off workers, then you’re going to expand the supply of workers who could plausibly be hired. Then employers will feel more comfortable laying off workers because they know they can hire them if they need to,” he said.
Though different economists might have varying views on whether the market will steady or deteriorate, Harris said he doesn’t know of “any labor market optimists right now.”
“Once the layoffs start,” he added, “they could come fast and furious.”
When it comes to interpreting the numbers, Trump’s immigration policy is a key variable. The unemployment rate is the number of people who are unemployed divided by the number of people in the labor force. But that denominator is shrinking with the Trump’s administration’s aggressive deportation policy, said Joanne Hsu, director of the Surveys of Consumers at the University of Michigan. And a smaller supply of workers could lead employers to hire less, Gertler said.
Other factors that could be affecting hiring include the rise of artificial intelligence, which could be displacing human jobs, or just a generally weak economy.
WATCH: 3 things to know about AI and mass corporate layoffs
It’s unclear if the weak job market is caused by low labor supply or low hiring demand, Gertler said.
“It’s not as dire a situation as during the great financial crisis [of 2008], but in some ways it’s more complex because it’s hard to know which direction to go,” Gertler said. “During the great financial crisis, you knew the policy should be: you have expansionary monetary policy and fiscal policy. Here, it’s really tough to say.”
2. The lower inflation trade-off
One metric that’s dominated headlines since 2021 is the consumer price index, which measures change in prices over time, also known as inflation.
Between Sept. 2024 and Sept. 2025, the core CPI, which tracks all consumer prices excluding food and energy, increased 3%. That’s down from a high of 6.6% in Sept. 2022, but still above the government’s target rate of around 2% – a number not seen since early 2021.
Any movement toward that 2% goal would be a sign in the right direction, Gertler said. But inflation below that could also indicate a weakening economy.
For almost five years now, the Federal Reserve has been trying to tame inflation, and has only just begun lowering interest rates. A weak economy will see softening inflation, which could also reflect a slowing job market, as we’ve been experiencing.
READ MORE: The Federal Reserve wrestles with how many interest rate cuts to make and how fast
That’s the kind of trade-off the Federal Reserve might have to make, Gertler said.
“It may be some slowing of the economy is required to get the inflation rate down, but this is why the Fed is going gradually, so that it won’t have to be too disruptive to the labor market,” he said.
Harris also said that massive shortages in the housing market have been a major contributor to inflation since 2023. Housing alone takes up about a third of the CPI, according to Brookings.
“If housing inflation is 5 or 6%, it’s really, really hard to get down to 2% inflation,” Harris said.
In that case, the Fed raising interest rates – their typical response to rising inflation – won’t really help, he said. It might discourage more people from taking out loans to buy housing, but it also means more people won’t be selling, which reduces supply, he said.
3. A ‘flashing yellow light’ of consumer debt
Consumer debt in the U.S. is at an all-time high, with Americans owing $18.59 trillion, according to the Federal Reserve Bank of New York’s latest report. That debt includes student loans, auto loans, mortgages, home equity lines of credit, credit card debt and other loans.
When considering consumer debt, it’s important to break down macro and micro interpretations, Harris said.
On the whole, “consumption is really strong in the United States, and has always driven our economy – and it’s no different today,” Harris said.
READ MORE: Despite economic uncertainty, Cyber Monday could break spending records
Current debt payments as a percentage of personal income are relatively low, historically speaking. Debt payments comprise about 11% of personal income across all U.S. households, far lower than the almost 16% high it hit during the Great Recession and slightly lower than before the pandemic.
It’s one example of an economic indicator that may look unconcerning on the surface. However, Hsu said, looking at aggregate data alone may obscure worse or better factors in specific parts of the economy.
“On aggregate, things can look fine, and that would be totally consistent with vulnerabilities showing up, because the aggregate numbers are not good at identifying specific vulnerabilities,” she said.
One way to look under the hood is to examine transitions into delinquency. Credit card and consumer loan delinquency both began steadily rising in 2021, though there are signs they’ve leveled off.
“We’re not yet seeing foreclosures tick up very much, and so this is not necessarily 2008 all over again. The worst type of transitions into delinquency are when people can’t make payments on their home. It’s one thing to not be able to make a payment on your credit card; it’s another thing to worry about getting evicted,” Harris said, adding that he sees this moment as more of a “flashing yellow light, not a flashing red light.”
4. A self-fulfilling consumer sentiment prophecy?
In November, the University of Michigan’s Index of Consumer Sentiment fell to 51, down from nearly 72 a year ago.
That decrease is driven by twin pressures, said Hsu, the survey’s director. At the same time that consumers are frustrated by high prices, they’re also worried about the stability of their incomes.
READ MORE: How to make the most of your holiday gift budget
The second worry in particular defines this period of low sentiment, she said, unlike in the inflationary period right after the pandemic.
“We still have people who are unhappy about high prices, cost of living, affordability. But unlike three years ago, now they’re also worried about their incomes,” Hsu said.
She added that when they asked people if they think unemployment will get worse in the year ahead, 69% said yes, more than double the number of people who felt that way last November.
Breaking down respondents into higher- and lower-income households can also help clarify how people view the economy right now.
“The lion’s share of consumer spending is being generated by higher-income and higher-wealth consumers,” Hsu said. Those people still “don’t feel great” about the economy right now either, but they’re backed by strong financial assets, stock values and incomes, so they report they feel supported to keep spending. Middle- and lower-income people are much less likely to report that they expect their income to increase next year compared to higher-income individuals.
Consumer sentiment can also align along partisan lines. Michigan’s data, which include respondents’ political parties, show that the overall national results track closely with how independent voters feel.
Though consumer sentiment might seem more reflective than predictive, there’s the possibility that it could become a self-fulfilling prophecy, Hsu said.
“It’s called ‘the paradox of thrift,’ where if you think dark times are ahead, it makes sense for each individual family to pull back, to save more, to save for the rainy day and protect themselves. But if enough people do that, people are going to stop spending on a large scale,” she said.
The result could be businesses losing money, laying off workers and ultimately generating a negative feedback loop.
A free press is a cornerstone of a healthy democracy.
Support trusted journalism and civil dialogue.