Stock Market Boom and Rising Inequality Mark 2025 US Economy
In 2025, the US economy presents a stark contrast between soaring stock prices and widespread poverty. The S&P 500 has risen about 86% over the past five years, largely driven by an AI boom. However, this growth has disproportionately benefited the wealthy: the top 1% own roughly 50% of stocks, the top 10% own 87.2%, while the bottom 50% hold only 1.1%.
In lower Manhattan, luxury retailer Printemps opened with upscale amenities such as an ice rink on the second floor, a bar, and a champagne cart to create a French apartment-like shopping experience. Meanwhile, across from Trinity Church, hundreds of people line up for free food and necessities, highlighting the divide between luxury consumption and poverty.
Economic indicators show inflation rising from 2.3% in April 2025 to 3% in September 2025, and unemployment increasing from 4.0% in January to 4.4% in September. According to the Yale Budget Lab, tariffs imposed under Donald Trump will raise prices by about 1.2% in the short term, costing the typical household approximately $1,700.
Public perception of Trump's handling of the economy has worsened; his approval on inflation has dropped from +5% after inauguration to -35% by November 2, 2025, according to YouGov/Economist polling.
In New York City, the poverty rate has reached 25% this year, significantly above the national average of about 13%, amidst rising costs and cuts to anti-poverty programs, as found by the Robin Hood Foundation. This situation reflects a K-shaped economic recovery: high-income consumers spend more, driving growth in premium products seen in companies like Coca-Cola and Delta (which cites premium travel gains), while mid- and low-income consumers struggle with financial pressures, with firms like McDonald's noting the strain on their customer base. Lower-income spending is growing more slowly compared to higher-end sales.
