If you’ve been watching the news lately, you’ve probably heard conflicting signals about the economy. Some headlines warn of recession; others celebrate resilience. The truth, as usual, is somewhere in the middle. Here’s a look at what the data is actually telling us, and what it means for you.
The labor market—one of the most important indicators of recession risk—is cooling, but not cracking. As of late 2025, the unemployment rate sits at 4.6%, up from a cycle low of 3.4% in 2023, though still below its 30-year average of 5.5%. Job openings have come down from a record 12 million in 2022 to about 7.7 million, returning to pre-pandemic levels. Hiring has slowed and layoffs have ticked up slightly, but both have settled into a range that looks more normal than alarming. Credit markets reinforce this picture—bond investors aren’t pricing in significant default risk, which is typically what we’d see if a recession were imminent. The bottom line: a downturn in the next 12 to 18 months isn’t impossible, but the data today looks more like normalization than a warning siren.
Meanwhile, a notable shift is underway in global stock markets. After 15 years of U.S. dominance, 2025 saw nearly every major international market outperform the U.S. The S&P 500 now represents over 64% of global stock market value—up from 30% in 1987—and U.S. valuations look stretched by historical standards. Historically, long periods of U.S. outperformance have been followed by cycles where international markets catch up, especially when the dollar weakens. This is why we continue to advocate for globally diversified portfolios.
Perhaps most important is the long view. Since the 1920s, economic expansions have averaged 49 months while recessions have averaged just 14. In the stock market, bull markets have averaged 70 months with returns of 221%, while bear markets have averaged 14 months with declines of 39%. Over any 20-year rolling period since 1950, stocks have never lost money.
The key to capturing those long-term returns is not selling at the wrong time. That’s why sound financial planning ensures you have enough safe, liquid money to cover two to three years of spending needs—so that when markets inevitably decline, you can ride it out rather than locking in losses. At Prism, our mission is to empower you to pursue your dreams and passions while ensuring you feel well cared-for, informed, and secure. We don’t react to every headline. We build plans that account for the inevitable twists and turns—and stand beside you as you navigate them.
Market and economic data referenced in this article are sourced from J.P. Morgan Asset Management’s Guide to the Markets – U.S., 1Q 2026, as of December 31, 2025.
Prism Planning & Solutions Group is a dba of Insight Advisors, a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where Insight Advisors and its representatives are properly licensed or exempt from licensure. This material is solely for informational purposes. Past performance is no guarantee of future results. Investing involves risk and possible loss of principal capital. No advice may be rendered by Insight Advisors unless a client service agreement is in place. The views reflected in this article are subject to change at any time without notice. Nothing herein constitutes investment advice or a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.
