- 2025-12-29
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
CONNELL McSHANE: Let’s bring in Scott Martin, Chief Investment Officer at Kingsview Wealth Management. Scott, good afternoon. Welcome.
SCOTT MARTIN: Hey, how are you doing?
CONNELL McSHANE: I’m great. We’ve seen a lot of shoppers behind Leah — we’ve been showing shots from malls across the country. People are out there spending money. The U.S. economy is doing well despite some headwinds from tariffs. GDP expanded at 4.3% in the third quarter — that’s pretty strong.With that said, that strength doesn’t seem to reflect how Americans feel about the economy. Overall sentiment remains pessimistic. What’s the disconnect? What’s keeping the economy growing despite the gloomy mood for so many Americans?
SCOTT MARTIN: It’s one of those funny situations where consumers aren’t feeling as good as they were a year ago — or as good as they thought they would feel by now. What consumers seem to be doing to deal with that malaise is spending anyway.
You mentioned GDP — consumer spending is a huge part of the U.S. economy, and it’s showing up very strongly. I think two things are happening. First, pollsters may not be surveying the biggest spenders, who tend to be higher-income consumers. Second, consumers are very flexible and emotional about spending. One day they feel pessimistic, the next day they go out and spend anyway. That’s helping support growth overall.
CONNELL McSHANE: We also have to talk about the government shutdown. We know it had a big impact on economic data over the past few months. Do you expect to see revisions to some of these numbers?
SCOTT MARTIN: Yes, I do. Anytime you have disruptions like that, revisions are likely. But overall, the underlying trend still points to continued economic activity. Consumers generally still feel stable enough to spend, and that supports continued growth going forward.
CONNELL McSHANE: We did see unemployment rise last month — it hit 4.6% in November, the highest level this year — while wage growth has slowed. Do you think those trends continue into 2026?
SCOTT MARTIN: I do — and I don’t necessarily think that’s a bad thing. Unemployment was extremely low, and wage growth was leveling off. A slightly higher unemployment rate can actually give employers more flexibility in hiring and potentially support healthier wage growth over time.
Also, remember that unemployment rises when more people enter the workforce looking for jobs. That’s not always negative. An unemployment rate in the 3–6% range can still reflect a healthy economy.
CONNELL McSHANE: We’re also seeing a widening spending gap between higher-income and lower-income Americans — what some experts are calling a “K-shaped economy.” Is that divide sustainable?
SCOTT MARTIN: For a period of time, yes. But it’s not sustainable forever. The top end of the “K” can only go so high, and the bottom can only go so low. Eventually those paths have to converge.
Since COVID, we’ve seen a clear divide between those who have benefited and those who haven’t. The higher-income group is carrying much of the economy, while lower-income households struggle. That imbalance can persist for a while, but over time the economy has to normalize.
CONNELL McSHANE: We talked a lot about inflation in 2025, and it hasn’t risen as much as some expected. Do you think prices could level off in 2026?
SCOTT MARTIN: I’m actually more concerned about inflation in 2026 and 2027. I think the economy may be stronger than many realize. The Fed is cutting rates in what’s still a relatively strong economy — that’s unusual.
If growth remains solid and stimulus continues, inflation could reaccelerate. That could force the Fed to stop cutting rates, or even raise them again in the next year or two.
CONNELL McSHANE: Finally, what are your predictions for the economy in 2026?
SCOTT MARTIN: I expect job growth to average around 150,000 jobs per month, GDP growth near 4%, and wage growth in the 4–5% range. That would represent a strong, sustainable economy.
CONNELL McSHANE: That’s a bullish outlook — and we hope you’re right. Scott, thank you so much. Merry Christmas, and thanks for coming on tonight.
Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser. Insurance products and services are offered and sold through Kingsview Trust and Insurance Services (“KTI”), by individually licensed and appointed insurance agents. KWM and KTI are subsidiaries of Kingsview Partners. KWM is an investment adviser registered with the Securities and Exchange Commission (“SEC”).
