Strong foundations for economic growth
I often hear concerns about consumer debt reaching all-time highs. Every balance sheet has two sides: assets and liabilities. The media tends to focus on the negative side. The reality is that U.S. households are on strong financial footing. Household leverage (i.e., the ratio of liabilities to assets) fell to 10.6% in Q2 2025, the lowest since the 1960s.
Meanwhile, household and nonprofit net worth has climbed to $176 trillion in Q2, up 4.2% from the prior quarter and 6.1% year over year. And since 2019, household real estate values have grown nearly twice as fast as residential mortgage debt (65.0% versus 30.2%), pushing homeowners’ equity to historic highs.
Debt may grab headlines, but household assets tell a balanced story. Consumers drive 70% of U.S. GDP. Their savings, equity, and assets provide stability for economic growth. Strength doesn’t always come from rapid expansion, but from solid foundations.
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Featured Article
Simple steps for stronger cybersecurity
October is Cybersecurity Awareness Month, a good reminder to protect your personal and financial information online. One of the most effective ways is to create strong passwords.
Cybercriminals often rely on two common tricks. One is testing stolen username-and-password combinations across many different websites to catch people who reuse them. Another is running long lists of common or previously leaked passwords against an account to see if any of them work. Both methods highlight why every account should have its own unique password.
A strong password should be at least 12 characters long and include a mix of uppercase and lowercase letters, numbers, and special symbols. Since keeping track of many complex passwords can be overwhelming, a password manager helps by storing them in an encrypted vault and automatically filling in the password you need.
Consider updating your passwords to make them stronger and using a password manager for additional security. Taking these simple steps can go a long way in keeping your personal information safe.
Your market outlook
GoalVest advisory update
Equity markets advanced for the fifth consecutive month, supported by a steady economy and continued interest in next-generation technology.
| Market | September | Year-to-date |
|---|---|---|
| S&P 500 | +2.8% | +13.9% |
| Nasdaq | +4.6% | +17.0% |
| Dow Jones Industrial | +1.4% | +9.6% |
| Russell 2000 | +3.0% | +10.2% |
| Bloomberg Aggregate Bond Index | +1.2% | +6.3% |
Data represented through Sept. 24
The CBOE Volatility Index (VIX) closed at 16.2 on Sept. 24, continuing a downward trend from the intraday high of 60.1 in April. Levels under 20 are considered stable, and this trend indicates that investors are less worried about inflation and tariffs than they previously were. Fixed-income markets also remained positive after a slow start to the year.
Technology-driven earnings
September began with a strong earnings beat from Oracle on Sept. 9. While the company’s data management business stayed flat, its AI cloud business more than doubled, with forecasts of over 100% growth. Oracle’s momentum helped propel the technology sector and fuel the overall equity market.
Economy and employment
On Sept. 11, the Bureau of Labor Statistics released the August CPI inflation report. Overall prices rose 2.9%, up slightly from the previous month. Tariffs and higher utility costs contributed to the increase, but markets shrugged it off as transitory.
The BLS also reported August employment data, showing only 22,000 new jobs and an unemployment rate of 4.3%. Equity markets saw this as a sign for lower short-term interest rates. On Sept. 17, the Fed cut rates by 25 basis points and adopted a more dovish stance than expected. Markets now anticipate an additional cut by the end of the year. While tariffs may continue to influence CPI and dampen cuts, their impact has been manageable so far, especially for larger companies.
Valuation is the key concern heading into next quarter’s earnings. Nevertheless, this year’s earnings growth and economic resiliency are encouraging.
Looking ahead
Driven by earnings, equity markets are positioned to perform well in the final quarter of 2025. Volatility could reemerge if inflation accelerates or earnings disappoint, though this is not expected. Current tariff levels are less disruptive than earlier in the year.
Investment opportunities persist across private equity, private credit, venture growth, technology, and dividend-oriented names. Market valuation currently stands at 22.6 times forward earnings, slightly higher than at the start of the year. Leading U.S. companies are innovative, profitable, and well-managed. Overall, the economy remains solid and supportive of a positive outlook.
Sources: JP Morgan Asset Management, Bureau of Economic Analysis, Bureau of Labor Statistics, Morningstar, Factset, Barron's, KKR, and YCharts
