The U.S. economy is maneuvering through a complex landscape of growth, inflation, and uncertainty — yet recent data from multiple sources suggest that despite mounting risks, the economy is showcasing a surprising degree of resilience. That said, underlying vulnerabilities remain. Below we unpack what’s keeping the economy afloat, where tension points lie, and what it could mean for U.S. households and markets.—A Glimpse of the Bigger PictureAccording to the International Monetary Fund (IMF), the U.S. economic growth forecast for 2025 has been modestly revised upwards to about 2.0 %, with 2026 expected at roughly 2.1 %. While this is slower than earlier years (for example, the U.S. grew 2.8 % in 2024) the upgrade reflects that the worst-case outcomes may not materialise. Further, some of the more negative predictions of a recession appear to have been pushed out — or at least delayed. Investment activity, particularly in the artificial-intelligence (AI) sector, has been cited as a key contributor supporting the economy and deferring sharper slowdowns. Still, for many Americans, the lived experience doesn’t quite line up with optimistic macro data — there remains widespread anxiety about job security, rising costs, and how long the positive momentum can last. —What’s Holding Up the Economy?Several factors are playing a stabilising role:Tech & AI investment: The surge in AI-related investment has been singled out by the IMF as a major upside for the U.S. economy in 2025. Innovations, productivity bets and capital inflows into tech are mitigating some of the drag from other sectors.Robust equity markets: Recent stock market gains help support household wealth and confidence to some extent. For example, the S&P 500 recently rose toward record highs, showing investor appetite remains strong. Moderate inflation: While inflation remains elevated compared to targets, the rate has moderated somewhat from recent peaks. The narrative of “out of control inflation” has softened, which helps both consumer sentiment and policy-maker decisions. Housing indicators showing glimmer of hope: For example, home-builder sentiment jumped to a six-month high in October 2025, suggesting that housing sector momentum may be stabilising. Together, these elements give the impression that the economy is limping, but not collapsing, and that the U.S. may avoid the worst-case “hard landing” scenario many feared.—Key Risk Factors and Areas of ConcernDespite the relative resilience, the economy is beset by structural issues and emergent risks:Consumer unease & job market stress: Nearly half of American adults report lacking confidence in finding a “good job,” even though headline unemployment remains low. The disconnect between macro employment numbers and consumer sentiment is worrisome.Tariff-driven inflation and cost-shocks: For example, U.S. tariffs introduced in 2025 are estimated to cost global companies more than US$35 billion and will have ripple effects for consumers and domestic producers. Some estimates suggest U.S. consumers will bear more than half of tariff-related costs. Government shutdown and data disruption: The ongoing federal government shutdown has delayed key economic indicators — including inflation, jobs, and productivity metrics — complicating decision-making for both businesses and the Federal Reserve. Growth still slow and below trend: Though the forecast was upgraded by the IMF, growth in the U.S. remains below the pace seen earlier in the decade and below the levels many policymakers regard as “healthy.” Elevated inflation relative to target: While inflation has moderated, it remains above the Fed’s preferred target (~2%). For example, inflation remains around 2.7 % in the PCE gauge, according to Fed watchers. Together, these risks suggest that the economy is balanced on a fine line: the factors supporting growth must continue (investment, consumption, employment) while the risks (tariffs, policy uncertainty, labor market softness) cannot worsen markedly.—What This Means for U.S. Households and BusinessConsumers: For many households, especially those without high incomes or savings buffers, the combination of ongoing inflation (rising living costs) and uncertain job prospects creates a squeeze. Reports indicate that 75% of Americans say their monthly expenses have increased. Homeowners & Housing Market: The uptick in home-builder sentiment is a positive sign, but the housing market remains cautious. Many buyers are still wary, citing job uncertainty and elevated costs. Lower mortgage rates help, but until labor market confidence recovers, housing demand may remain muted.Business & Investment: For firms, the relative stability of growth and the momentum in tech investment provide some upside. Yet uncertainty about tariffs, regulatory policy, and macro data flow delays complicate capital allocation decisions. Exporters and those reliant on global supply chains face particular pressures.Policy & Markets: For the Federal Reserve and U.S. policymakers, this environment presents a dilemma. Do they tilt toward easing (to support growth) given the labour softness, or stay cautious because inflation is still above target and risks remain elevated? The market reaction has been positive thus far, but it is contingent on clarity from policymakers.—Outlook: What to Watch NextOver the coming months, the following indicators and developments will be critical:Inflation data releases: Delayed by the shutdown, but once released, they will influence the Fed’s interest-rate decisions and market expectations. Labour market metrics: Beyond headline unemployment, metrics like job-quality, wage growth, and labour-force participation will give deeper insight into household stability.Tariff policy & trade developments: Any further escalation in tariffs or trade conflicts (notably with China or major partners) could reintroduce inflation or growth shocks.Corporate earnings and investment trends: Especially in technology and AI, continued capital deployment can help sustain growth, whereas a pull-back could signal weakening momentum.Policy actions and government funding: The resolution of the government shutdown and clarity around federal spending will matter for confidence and business planning.—ConclusionIn summary: the U.S. economy is showing noteworthy resilience given the headwinds it faces. Investment in emerging sectors like AI, relatively stable labour markets, and well-performing financial markets are providing a cushion. However, underlying weak spots—rising costs for consumers, labour market confidence shortfalls, policy uncertainty and trade pressures—mean things are far from smooth sailing.For readers and citizens, the takeaway is that cautious optimism may be warranted: the economy may avoid a crash, but the journey ahead is likely to remain bumpy rather than smooth. For the businesses and consumers who stay alert and adaptable, there are opportunities; for those with less resilience, the next shock may be tougher to absorb.