Offshore

EndGame Macro
Ending 2025 Take On The U.S. Economy…And An Apology From The Bottom Of My Heart For My Realistic Yet Pessimistic Takes On The State Of The Economy….

As 2025 ends, the U.S. economy still looks solid at the surface. Stocks are higher. GDP prints are strong. Unemployment remains low by historical standards. But once you step back and connect households, labor, credit, and real world activity, the picture becomes more fragile.

This isn’t an economy in freefall. But it is one being carried by a shrinking set of supports while pressure builds underneath.

Growth and Markets: Real Numbers, Narrow Support

Real GDP grew at a 4.3% annualized pace in Q3, the strongest in two years, driven mainly by consumer spending (+3.5%) and exports (+8.8%). On paper, that looks like acceleration.

The issue is what kind of spending is doing the work. Roughly 70% of GDP is consumption, and an increasing share reflects non discretionary or imputed costs, not confidence. Healthcare alone accounts for 17% of PCE, running near $3.6T annualized. That lifts GDP, but it says more about rising mandatory expenses than broad consumer strength.

Markets told a different story. The S&P 500 gained 17–19%, the Nasdaq 21%, and the Dow 11%, powered by AI optimism and expectations of easier Fed policy. Asset prices moved ahead. Household reality did not.

Labor and Sentiment: Cooling Is Becoming Visible

The labor market is no longer tightening. Unemployment rose to 4.6% in November, up from 4.1% in January, with just 64,000 jobs added. Underemployment (U-6) climbed to 8.7%.

Layoffs reached 1.17 million through November, up 54% year over year, concentrated in tech, healthcare, and industrials. Consumer sentiment reflects that shift. The University of Michigan index ended December at 52.9, nearly 30% lower YoY, while the Conference Board index fell to 89.1, its fifth straight monthly decline.

Household Stress Is Broadening

Debt pressure is spreading across categories…

• Credit card delinquencies: 12.4%, exceeding 20% in lower income areas
• Auto loans: 5.02%, a 15 year high
• Student loans: 9.4%, rising sharply after repayment resumed
• Mortgages: 3.76%, with FHA near 10.8%

Bankruptcies are rising alongside it. Filings are up 8–10% YoY, with 717 large corporate cases, the highest since 2010. Individual filings rose 8%, with roughly 41,000 in November alone.

CRE, Trade, and the Physical Economy

Commercial real estate remains a pressure point. Office vacancy rates sit near 19%, well above long term norms. Industrial vacancies have edged higher, while retail remains comparatively tight.

Trade policy added another layer of strain in 2025. Average tariffs moved above 15%, including 50% on steel and aluminum and 35% on Canadian goods complicating supply chains.

Trucking: A Quiet Signal

Freight continues to confirm the slowdown in goods demand. Truck tonnage rose just 0.2% in November, but remains down nearly 7% YoY. Spot rates are lower, and load postings are down 15–22%, pointing to soft volumes and ongoing capacity adjustment.

Overall

The U.S. economy is increasingly unbalanced. Growth is being padded by non discretionary spending, markets are running ahead of household fundamentals, labor is cooling, and credit stress is spreading.

This is the late cycle phase where momentum fades quietly, long before the data forces a name onto it.
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