May 2025 Market & Economic Update: Is the Economy Losing Steam?

In our May 2025 Market & Economic Update, Jim Kruzan, CFP®, CRPC®, walks through the latest economic data and trends and what they may indicate about the broader economic outlook.

Here’s What We’re Watching:

• Leading Indicators Still Flashing Caution
  We start each update by reviewing the Conference Board Leading Economic Index, which has a strong historical record of signaling recessions. Right now, it continues to show signs of weakness.

• Consumer Stress Rising
  There’s been a continued rise in credit card delinquencies and mortgage defaults—signals of strain on household budgets.

• Manufacturing Slowdown
  Many indicators in the manufacturing sector suggest a recession is already underway in that part of the economy, even if equity markets haven’t reflected it yet.

• Real Estate is Cooling
  Home sales are at their slowest pace since 2009, and inventory is beginning to build. While new construction remains relatively strong, the existing home market is softening, and price adjustments could follow if the inventory trend continues.

• Job Market Softness Emerging
  Initial jobless claims increased throughout May, and new job creation came in below expectations—not yet alarming, but worth watching closely.

• Extended Valuations in the Market
  Despite recent optimism tied to tariff news, stock market valuations remain historically high. As Jim discusses in the video, coupling decelerating economic growth with extreme valuations is hardly a recipe for success.

For Jim’s full commentary and thoughts, watch the Full Video Update below. 

If you’d like to talk about how these trends may impact your financial strategy, reach out to our team.

We’re here to help you stay on course—through every market cycle.