Weekly Report 48/2025

The middle class in America is suffering

According to the University of Michigan, the confidence index fell to 51.0 in November (from 53.6 in October). Opinions on personal financial situations were more negative than at any time since the major financial crisis of 2008/2009. Survey data and studies by private companies have recently gained in importance as federal agencies, once known for their “gold standard” economic data, have lost reliability, significance, and credibility. Some statistics (such as the number of new jobs created) are now being “created” by President Donald Trump’s followers.

What can be counted are the unemployed. Their number has risen to 4.4%, particularly in an important segment of Donald Trump’s electorate (Latinos). Last Friday brought more bad news for the faltering US economy and for the president. Clearly, the “golden age” he sees emerging has not yet taken hold of the masses. As far as Americans are concerned, they are looking toward a rather bleak future. With inflation at 3% and unemployment rising, the third part of the problematic trio, consumer confidence in the US, has also fallen to one of its lowest levels since records began.

What is particularly irritating, by the way, is that 25% of unemployed Americans now have a college degree that they worked toward for four years. Behind this lies the sharp decline in new hires in service jobs (“white-collar hiring”). More than 1.9 million Americans with a bachelor’s degree and aged 25 or older are unemployed, heightening fears of being replaced by AI-driven solutions. But even among 20- to 24-year-olds, unemployment stands at 9.2%, a level never before seen outside of a recession.

The euphoria surrounding the US stock markets appears to be waning. Last week alone, the relevant indices lost significant ground (-1.9% to -2.7%). As a result, although the Dow Jones was still up in local currency terms since the beginning of the year (+8.7% in USD), it was clearly down in Swiss francs (-3.2%). The broad S&P 500 Index is unchanged (+0.0% in CHF). Since the beginning of the year, only the US tech index Nasdaq has closed slightly up (+2.7% in CHF). Five weeks before Christmas, the global stock index is just +2.6%.

Donald Trump’s politically controversial peace plan for Ukraine is likely to be a key topic this week. Last week, speculators got cold feet and sold off European defense stocks such as Rheinmetall (-12%), Hensoldt (-14%) and Renk Group (-22%) in droves. By contrast, Swiss pharmaceutical and diagnostics group Roche (+10%) achieved the third-best weekly performance in the Stoxx Europe 600 Index.