Americans Look Ahead: Hope in the Markets, Fear in Politics
Americans predict 2025 will be a year of political conflict both domestically and abroad. But a slight majority also believe it will be a good year for the economy.
Gallup regularly polls Americans on their outlook for the year ahead. According to the 2025 results, the public is divided between cautious economic optimism and deep political pessimism.
Americans are most upbeat about how the economy is performing. 52% believe prices will rise at a reasonable rate, 54% think employment will increase, and 66% predict the stock market will climb. This optimism likely reflects confidence in the so-called “Trump trade.”
But even this optimism is tempered by personal financial worries: 61% anticipate difficulties making ends meet in their household. And sanguine expectations about employment growth will likely meet tough headwinds before winter is out. Big negative NFP revisions are due in February; and foreign-born employment, having already fallen for three straight months under Biden’s revamped immigration rules, is likely to fall even faster after January 20. (See “All About the Indicators: August.”) Let’s see what the public thinks come March or April.
So much for the upbeat news. Now for the downbeat: The public remains quite pessimistic about the political climate, both at home and abroad. Domestically, 62% believe the federal deficit will worsen, and 76% foresee heightened political conflict. Internationally, 67% predict a year marked by global discord, with majorities believing Russia (52%) and China (61%) will expand their influence on the world stage.
Republicans are more optimistic about 2025 than Democrats. A majority of Republicans predict a positive year for every scenario except political cooperation. Conversely, a majority of Democrats are negative on every measure. This mirror-image divergence in sentiment is nothing new. Since the early 00’s, the switching of the White House from one party to the other has always triggered a dramatic mood boost among Americans backing the winning party and a precipitous mood decline among the losers. (See “Soft Indicators Could Take a Hard Fall.”)
Overall, the negative predictions far outnumber the positive ones. Yet Americans of both parties expect the stock market to keep soaring. Is this a sell signal? Possibly. Unless the public is entirely wrong about all the bad stuff. Or unless the market no longer cares about the bad stuff. But of course that in itself is a danger signal. As the saying goes, a market that keeps rising in the face of everything going wrong is a market that could tank in the face of anything going wrong. (See “Americans’ Pessimism Soars” and “American Happiness Declines.”)