Have you walked into a mall lately and felt like everyone suddenly has money to burn? I did last weekend. The parking lot was a nightmare, the lines were endless, and people were walking out with bags stacked to their chins. Yet if you open any social media app, half the comments are about how “nobody can afford anything anymore.” Which version is real? According to the guy who now signs America’s financial report card, both are… and neither.
A Surprisingly Rosy Forecast From the Top
Last Sunday the Treasury Secretary dropped a line that caught a lot of us off guard. Despite everything—government shutdown drama, sticky inflation echoes, and headlines screaming about layoffs—he expects the United States to close out 2025 with 3% real GDP growth. Not 2.2%, not “maybe 2.8 if we’re lucky.” Three. Full. Percent.
Think about that for a second. Most developed economies would kill for consistent 3% growth. We’re talking about an economy that already runs on the biggest consumer base in the world, adding that kind of steam heading into a new year. And his reasoning? Simple: Americans are shopping like it’s 2019 all over again.
The Holiday Season Nobody Saw Coming
Every year analysts try to predict the holiday retail haul. This year most forecasts were cautious—higher interest rates, lingering grocery sticker shock, election fatigue. Yet foot traffic numbers rolling in now are blowing past even the most optimistic estimates.
People aren’t just buying the necessities. They’re upgrading phones, splurging on luxury handbags, booking winter vacations. One major retail CEO privately told investors last week that same-store sales are running 8-12% above plan. That’s not “getting by.” That’s booming.
“It’s been a very strong holiday season so far—frankly stronger than anyone in Washington expected.”
Treasury Secretary Scott Bessent
When the person in charge of the nation’s balance sheet uses the phrase “very strong,” investors listen. And the market has been listening—the S&P 500 keeps grinding higher, small-cap stocks are on fire, and consumer discretionary names are leading the charge.
So Why Do We Feel Broke?
Here’s where it gets fascinating. The data says one thing, but kitchen-table conversations say something completely different. Consumer sentiment indexes are still stuck in the doldrums—some of the lowest readings since the pandemic lows. Roughly two out of three voters tell pollsters the economy is on the wrong track.
How can both things be true at the same time? I’ve spent years covering markets, and this disconnect feels bigger than anything I’ve seen since maybe 2009. Part of it is psychological scarring from the inflation spike. When eggs hit six bucks a dozen, people remember. Even when they fall back to three, the memory lingers.
- Grocery prices are still 25-30% higher than 2020 levels
- Rent and home prices reset the baseline for “normal”
- Car insurance and medical bills keep climbing
- Everyone compares today to the ultra-low-inflation 2010s, not to the 1970s or 1980s
Add in a 24/7 news cycle that thrives on fear, and suddenly a solid expansion feels like a recession to millions of households. The Treasury Secretary put it bluntly: a lot of the “affordability crisis” talk is political noise that stuck around long after the actual crisis eased.
Breaking Down the GDP Math
Let’s actually look under the hood, because 3% isn’t a random cheerleader number. The economy has already shown it can do this—and more—in recent quarters.
| Quarter | Real GDP Growth (annualized) |
| Q1 2025 | -0.6% |
| Q2 2025 | +3.8% |
| Q3 2025 (Atlanta Fed estimate) | +3.5% |
| Q4 2025 (projected) | ~3.0%+ |
Yes, we had a weird negative print early in the year—thank government spending quirks and inventory swings. But the underlying trend has been remarkably strong. Consumer spending, which drives nearly 70% of activity, never really rolled over. Jobs kept getting added. Wages finally outran inflation for most workers.
And now the holiday surge looks like it will give Q4 the kind of tailwind that locks in that 3% full-year number. In my experience, when retailers crush November and December, the ripple effects show up in everything from trucking to temporary hiring to credit-card interest income for banks. It’s a virtuous cycle.
What Happens Next Year?
Here’s where I get a little optimistic—maybe more than some of my cynical finance friends. If the administration delivers even half of its promised deregulation and energy production push, the stage is set for a genuine prosperity rebound in 2026 and beyond.
Think lower compliance costs for small businesses. Cheaper gasoline and electricity bills. A labor market that stays tight enough to keep forcing wage gains. Throw in AI-driven productivity gains that are only starting to hit the numbers, and suddenly 3% growth might look like the floor, not the ceiling.
Of course risks remain. Tariff fights could flare up. The Fed could misjudge the last mile of inflation. Geopolitical shocks are always one headline away. But right now the hard data—retail sales, freight volumes, job openings—is painting a picture far brighter than the mood.
The Bottom Line for Investors and Everyday Americans
If you’ve been sitting on cash waiting for the “big crash” that never quite arrives, this might be the wake-up call. Economies this resilient have a habit of grinding higher and making bears look silly. That doesn’t mean buy every meme stock, but it does mean quality companies with pricing power and strong balance sheets are likely to keep compounding.
For regular families, maybe it’s time to tune out some of the doom-scrolling and look at your own numbers. Are you employed? Is your wage rising faster than your grocery bill lately? Did you just drop a grand on holiday gifts without maxing out cards? If the answer is yes to most of those, congratulations—you’re living in the strong economy the statistics have been screaming about for months.
Sometimes the gap between perception and reality is exactly where opportunity hides. And right now that gap feels wider than it has in years.
So next time someone tells you “everything is unaffordable,” hand them the receipt from their own shopping cart. The numbers don’t lie. Sometimes we just need a gentle reminder to see them clearly.
