Archive December 31, 2025

The report card showing how well the US economy is performing as it enters 2026 is complex.

The world’s largest economy appears to be in a strong position by many measures, including by many measures.

Recent growth has outperformed the predictions of the majority of analysts following President Donald Trump’s tumultuous year marked by his return to office and his inclination toward tariffs and protectionism.

Trump praised his economic performance in a speech this month, claiming that the US was experiencing an “likes of the world has never seen” boom.

However, signs of weakness that point to potential risks are hidden within the economic data. Americans are fundamentally pessimistic about their physical condition.

As the year 2025 draws to a close, here are some of the key economic indicators for the US economy:

GDP growth

Gross domestic product (GDP) growth exceeded expectations in the July-September quarter, reaching an annualized 4.3 percent, after a modest expansion in the first half of 2025.

That was the most impressive performance in two years. Additionally, it was significantly ahead of the developed nations like the US.

The economies of the eurozone and the UK both increased by only 2.3 and 1.3 percent annually during the third quarter.

The fourth-largest economy in the world experienced a 2.3% decline during the same time.

Although robust, a number of tech giants, including Microsoft, Amazon, and Alphabet, have largely contributed to the US economy’s growth thanks to multibillion-dollar investments in artificial intelligence.

According to some estimates, spending on AI-related expenses accounted for 40% of total spending in 2025, including all other expenses and growth.

That leaves a lot to be desired, especially if AI can fulfill its untapped potential to transform the economy.

While many analysts think that AI will bring about a fourth industrial revolution, others worry that technology has been overestimated.

According to Campbell Harvey, an economist at Duke University, 2026 might be the year that decentralized financial technologies and artificial intelligence (AI) start to significantly increase productivity.

According to Harvey, “We are in the early stages of technologies like AI that can significantly increase productivity.”

Higher growth is a result. This higher growth from AI has not yet been realized.

Consumer opinion

Americans are generally unsatisfied with the state of their finances despite the US economy being strong on paper. Consumer sentiment is close to historic lows, in fact.

Consumer sentiment was up slightly in December for the University of Michigan’s index, which was 53.3 as of December’s high of inflation, compared to 50 in June 2022, which was at a four-decade high.

Americans are still spending, though.

The fastest rate since the end of 2024 was the increase in consumer spending of 3.5% during the July-September quarter.

The splurge has also not shown any signs of slowing down. Spending increased by 3.9% in the annual report from MasterCard for the holiday season compared to last year.

What causes the disparity between sentiment and spending? wealthy Americans’ and more modestly abled Americans’ fortunes diverge.

According to Moody’s Analytics, the top 10% of earners now account for roughly half of all spending, which is the highest proportion since 1989 when officials began gathering data.

Harvey predicted that Harvey would give the economy a six out of ten overall rating.

“Many people think that the US is stuck with a growth regime of 2% real GDP. Higher growth is a possibility, according to the third quarter. Many people, in my opinion, are too pessimistic. He argued that we require more ambition.

The International Monetary Fund had predicted a 2.7% growth rate at the start of Trump’s presidency, according to Rolf J. Langhammer, a researcher at the German institute for the world economy.

According to Langhammer, “the current strength is clearly lower, essentially 2 percent,”.

US stock market

After experiencing dramatic swings earlier this year with Trump’s tariff announcements, stocks are coming out on top in 2025.

The benchmark S&amp P 500 has increased by nearly 18%, easily exceeding the benchmark’s 10.5% annual return.

Although the majority of Americans own stocks, wealthier households have benefited disproportionately from the gains.

According to Gallup, household ownership rates range from 87 percent to 28 percent of those earning less than $50, 000.

Inflation

Prices have increased moderately despite concerns that Trump’s tariffs will aggravate inflation, but they are still below the US Federal Reserve’s 2 percent target.

In November, inflation decreased from 3 percent in September to 2.7% year over year.

Americans are still feeling the pinch despite inflation’s recent low of 9.1% in June 2022, when the country’s economy was in a similarly depressing state.

70% of respondents to this month’s PBS News/NPR/Marist poll said the area’s high cost of living was unaffordable.

Some economists have also urged caution against companies that delayed importing goods in anticipation of higher costs.

According to Langhammer, the question was whether or not living expenses would remain constant over the long term.

According to Langhammer, “imports are slowly fading, and the effects of tariffs on inflation are likely to become more obvious in 2026, in addition to the weak dollar,” noting that the average effective tariff rate, 17 percent, was roughly five times higher than it was before Trump took office.

Harvey claimed that the tariffs have had the least impact on the economy.

“In comparison to other nations, the US trade sector is very small. The US is one of the least trade-intensive nations in the world, according to he said, measuring trade intensity as the product of exports plus imports divided by GDP.

You can see that the proportion of imports in terms of GDP is about 14%, which is an additional way of looking at this. I think that the media’s coverage of tariffs is less important than the impact on the economy.

Employment

Despite Trump’s promise to restore US manufacturing excellence, unemployment has steadily increased since January, when he first began his second term.

The official jobless rate increased from 4 percent in January to 4 percent in November, reaching a four-year high of 4.6%.

Trump has attributed the rise to the Department of Government Efficiency (DOGE) of billionaire Elon Musk, but only a small portion of the total number of jobless people are employed.

The Philippine government is working toward a multibillion-dollar “smart city” that President Ferdinand Marcos Jr. hopes will become a “magnet for investors” and a “mecca for tourists” two hours north of the capital, Manila, on the vast grounds of a former US military base.

The New Clark City, which is being built on the former Clark Air Base, is central to the government’s effort to attract foreign investment and ease congestion in Manila, where nearly 15 million people live.

To accompany the city’s development, the government has also laid out an ambitious slate of projects at a nearby airport complex — new train lines, expanded airport runways, and a $515m stadium that officials hope will be enticing enough to draw the global pop singer Taylor Swift.

The indigenous Aeta village of Sapang Kawayan is wedged between the proposed stadium’s site and the new city’s expanding new city. The developments spell disaster for the roughly 500 families who reside there in rattan and nipa grass homes.

“We were here before the Americans, even before the Spanish”, said Petronila Capiz, 60, the chieftain of the Aeta Hungey tribe in Sapang Kawayan. The land is still being taken from us, according to the statement.

According to historians, American colonisers, who seized the Philippines from Spain in 1898, seized the 32, 000-hectare (80, 000-acre) tract that became Clark Air Base in the 1920s, dispossing the Aetas, a semi-district with dark skinned people thought to be one of the archipelago’s earliest inhabitants.

Many were displaced, though some moved deeper into the jungle inside the base and were employed as labourers.

In 1991, roughly four decades after granting the country its independence, the US handed the base to the Philippine government. The complex has been managed by the Bases Conversion and Development Authority, or BCDA. Some 20, 000 Aetas are thought to remain in the Clark area today, spread across 32 villages.

However, the majority of their land claims are unrecognised.

Residents of Sapang Kawayan fear that their claims could be pushed out before the government’s boom in development results in their expulsion. The community – along with other Aeta villages in Clark – is working with researchers from the University of the Philippines to expedite a long-pending application for a Certificate of Ancestral Domain Title, or CADT — the only legal mechanism that would allow them to assert rights to their territory and its resources.

Aetas young and old gathered in Sapang Kawayan in January, July, and September to assemble family trees and share photos and stories. In an effort to demonstrate that the community there predates colonial rule, volunteers documented every detail.

Their 17, 000-hectare claim overlaps with nearly all of the 9, 450 hectares designated for New Clark City, while 14 kilometres to the south is the airport complex where the new railway line, runway and stadium are slated to rise.

According to Capiz, the new city and airport complex “will eat up the fields where we farm, the rivers where we fish, and the mountains where we get our herbs” together.

‘ Taylor Swift-ready ‘

Under then-President Rodrigo Duterte, the Philippine government first made plans for New Clark City and promoted it as a solution to the crippling traffic in the city. The development is described as a “green, smart, and disaster-resilient metropolis,” according to the BCDA.

Construction began in 2018 with major roads and a sports complex that hosted the Southeast Asian Games in 2019.

The city’s completion, which is expected to take at least 30 years, is expected to take 1.2 million people.

The “Taylor Swift-ready” stadium is planned for New Clark City, but the BCDA is currently constructing three highways connecting the airport complex. Officials have hyped that the stadium, to be built by 2028, will lure Swift after she skipped the Philippines during the South Asian leg of her Eras tour last year.

According to Joshua Bingcang, president of the BCDA, “One of the main things that makes Clark so appealing to investors is its unmatched connectivity,” the airport, a nearby seaport, and significant expressways are just a few examples. However, we must increase our investment in infrastructure and expand this connectivity.

That expansion has come at a cost for Aeta communities.

According to Counter-Mapping PH, a research institute and campaigners, hundreds of Aeta families have been displaced since the city’s construction started, including dozens of families who were given a week to “voluntarily” to leave just before the Southeast Asian Games in 2019.

They warn that as the development progresses, thousands more could be displaced.

The BCDA has offered financial compensation of $0.51 per square metre as well as resettlement for affected families. Although it’s not clear whether 840 housing units will be built for displaced Aetas, it officially opened in July.

Aetas has no established legal claim to the area, so the organization claims that no displacement has occurred. In a statement to Al Jazeera, the BCDA said it “upholds the welfare and rights of Indigenous peoples” and acknowledges their “long historical presence” in central Luzon, where Clark is located. However, it was pointed out that Clark’s boundaries are consistent with “long-established government ownership” dating to the US military base and that no recognized ancestral domains are ascribed to the New Clark City.

The BCDA also argued that the National Commission on Indigenous Peoples (NCIP) handles requests for a Certificate of Ancestral Domain Title, and that it adhered to the “lands awarded to Indigenous peoples” rule.

The Clark International Airport Corporation, which oversees the airport complex, offered similar assurances, stating that “there are no households or communities existing in the said location”. Aeta communities are present in the extended Clark area, but none are present in the airport complex itself, according to the group.

‘ Since time immemorial ‘

CADTs are only awarded to a select few Aeta tribes.

While Sapang Kawayan and other nearby communities have filed applications since 1986, two certificates have been issued on the outskirts of Clark.

Marcial Lengao, head of NCIP’s Tarlac office, told Al Jazeera that to grant Aetas in Clark a CADT they must “prove that they have been there since time immemorial”, meaning, during or before the arrival of the Spanish colonisers to the archipelago 400 years ago.

According to him, the commission specifies the minimum requirements for a CADT: a map of the domain, a census of the population, and at least five clans that date back at least three generations or the precolonial period.

Lengao claimed Sapang Kawayan’s application has not yet finished these.

But even if the application is granted, the village faces another unique hurdle. Any CADT approved by the commission in the area must then be deliberated by the executive branch or the president’s office because the BCDA owns the land rights to Clark.

Lengao said, “They will be in charge of finding a win-win solution.”

Activists, however, denounced the NCIP’s requirements as onerous and warned that the longer&nbsp, Aetas remain without a CADT, the more vulnerable they are to losing their lands.

The Aetas will continue to be treated like squatters on their own land, according to local rights activist Pia Montalban of Karapatan-Central Luzon.

Among the most abused indigenous Filipinos

The Aetas, who rely on small-scale subsistence farming, are among the most historically disenfranchised Indigenous peoples in the Philippines. The Aeta population is not officially known, but the government considers them to be a small minority of the country’s indigenous peoples, numbering in the thousands.

According to The Aeta Tribe Foundation, they are among the “poorest and least educated” populations in the country.

“They are among the most abused Indigenous Filipinos”, said Jeremiah Silvestre, an Indigenous psychology expert who worked closely with Aeta communities until 2022 while teaching at the Tarlac State University. Many people have abused Aetas, partly as a result of their good-natured culture. Worse, they rely on land that has been systematically taken from them.

Silvestre, too, described the CADT process as “unnecessarily academic”, saying it required Indigenous elders to present complete genealogies and detailed maps to government officials in what he likened to “defending your dissertation”.

He noted that any changes to government personnel could restart the process.

In a report released last year by the World Bank, it was discovered that “indigenous Filipinos frequently face insurmountable bureaucratic challenges” when processing CADTs. The report called recognising and protecting Indigenous land rights a “crucial step in addressing poverty and conflict”.

Experts worry that Sapang Kawayan’s families may experience displacement and homelessness due to the absence of formal recognition.

Silvestre remarked, “There is no safety net.” “We may see more Aetas begging on the street if this continues. An indigenous culture will also be lost due to systemic poverty.

The territory for the Aetas in the former base is shrinking as the new projects grow, says Victor Valantin, an Indigenous Peoples Mandatory Representative for Tarlac Province, which includes parts of Clark.

“We’ll have to move and move”, he said. Shopping centers “will not move for us.”

Valantin continued to lament what he believed to be a well-known imbalance.