Mortgage and unemployment rates: 5 economic trends we're thankful for

1. Unemployment is (still) low. The unemployment rate has been below 4.5% for 47 consecutive months, nearly four years.

• That has only happened in one previous era, in data that goes back to 1948 — the four-year periods ending in 1969 and 1970.
• The boom times of the late 1980s, the 1990s, and late 2010s never matched this duration of low joblessness.

The intrigue: When the labor market began to slow from its 2022-era high boil, recession predictions were everywhere.

• As the unemployment rate started to rise from its modern low of 3.4% in April 2023, economists wrung their hands over an observation: There are few precedents for the unemployment rate rising significantly, absent a recession, then leveling off.
• But that's what happened. And while worrying signs abound, it still amounts to four years of basically sound conditions.

2. Artificial intelligence is starting to pay off. America is spending more on AI than any other nation, betting on technology that could have transformative effects for the economy and worker productivity.

• Even in a nation as politically fractured as ours, there is bipartisan agreement that the U.S. has much to gain from being the world's leader in this technology.

Between the lines: There's early research that AI is already causing a productivity surge in key fields, including scientific and medical research.

• As the Wall Street Journal's Greg Ip has written, AI has created a lot more fear and worry than previous major areas of innovation ("The Most Joyless Tech Revolution Ever", as he calls it).
• And we get the reason for fear. But it also holds the promise of jobs that in the future involve less scut work and higher wages.

What they're saying: "By automating certain tasks, [AI] could lead to a reduction in some types of jobs. But increased productivity leads to economic growth, which may create new employment opportunities," Federal Reserve vice chair Phillip Jefferson said in a speech this month.

3. Financial markets keep on keepin' on. The AI investment boom is most evident in the financial markets, where the stock market is near an all-time high — up 16% so far this year — even with recent days' pullback.

• That has likely benefited would-be retirees: The average 401(k) balance rose 9% in the third quarter compared to a year ago, reaching a record high, according to Fidelity.
• A traditional portfolio — 60% stocks, 40% fixed income — has returned almost 13% year to date.

The threats to U.S. financial markets that looked likely earlier this year — including global investors fleeing American assets en masse — have not come to pass.

4. Middle-income households are making more than ever. If we had to pick a single measure to capture the typical American family's economic well-being, it might just be real median household income.

• There's good news on that front: It hit a new high in 2024 and looks to do so again in 2025.

By the numbers: The household at the middle of the income distribution made $83,730 last year, per the Census Bureau.

• That came after four years in which the COVID-19 pandemic recession and post-pandemic inflation caused real median income to undershoot its 2019 level.
• The Census only releases its numbers once a year with a long delay, but other evidence points to progress on this front continuing in 2025.
• Motio Research prepares a monthly estimate of median real income based on microdata from the survey that feeds into the jobs report. It finds the August number to be an annualized $86,030, a 1.9% year-over-year gain.

5. Rates really aren't that high. There is a long list of reasons to think U.S. interest rates should be high. Despite them all, borrowing costs have not surged the way many anticipated.

Zoom out: It's not hard to count the reasons you might expect higher long-term interest rates. Inflation has been elevated for four years and counting, with tariffs still filtering through the system.

• The government is running enormous budget deficits.
• President Trump seeks a central bank that is less politically independent and more likely to follow his preferences.
• Earlier this year, doubts emerged in global markets about the U.S. dollar and Treasury securities as the bedrock of the financial system.

Yes, but: The 10-year U.S. Treasury note was yielding a hair above 4% Wednesday morning. It was higher than that this time a year ago.

• That's lower than they were at any time during the 1990s, and below the 4.5% or so before the global financial crisis, when the U.S. fiscal picture was on much more solid ground.

Zoom in: Mortgage rates, the long-term borrowing that most affects households, were at 6.23% Tuesday for a 30-year fixed-rate loan, per Mortgage News Daily.

• While that's high by 2010s' and early 2020s' standards, it is way down from the near 8% rates that prevailed in the fall of 2023.

The bottom line: The U.S. economy has plenty of issues, and there are risks ahead in all directions.

• But through 11 months of 2025, the overall trajectory is pretty darn solid.