Texas Border Business
The end of one year and beginning of another is a natural time of reflection and assessment. As far as 2025 goes, all I can say is – WHAT A YEAR! Economic changes occur constantly, but 2025 saw several large-scale shifts that will reverberate for years to come. As we wrap up 2025, let’s look back at some of the most notable economic highlights (and lowlights).
It began with a new President and a flood of new policies. One of the most impactful was the implementation of significant tariffs. Though the initial levies have been reduced through pauses, exceptions, and agreements, uncertainty has caused significant disruptions. Conversely, notable deregulation and other changes have enhanced growth potential.
Fewer Americans were on the move, due to both professional reasons (lower job openings and fewer workers quitting jobs to seek better ones) and housing challenges (with many unable and unwilling to move due to high housing costs and mortgage rates). Sales of existing homes reached a 30-year low in 2024, and 2025 doesn’t look much better.
In the first quarter, US gross domestic product (GDP) decreased for the first time since the pandemic. The key driver was a surge in imports to beat the clock on tariffs. However, many analysts were surprised by a sharp GDP increase in the third quarter (4.3%) even as job creation languished, illustrating the gyrations of the times. Manufacturing job losses were highly significant, largely due to the effects of tariffs.
Artificial intelligence continued to grow, impacting virtually every occupation and industry to varying degrees. Ultimately, AI will create more jobs than it destroys (as has every significant technological advancement since the wheel). In the meantime, we can expect significant disruption. Ongoing investments in the needed infrastructure were a bright spot in 2025.
Good news about the environment emerged, with new data indicating that total US CO2 emissions fell by 20% from 2005 to 2023, which is a 30% reduction in per-capita levels. A variety of efforts contributed to the decline, which occurred despite higher energy usage.
Beyond a sharp drop in undocumented border crossings, there was also a substantial downturn in legal immigration. Foreign-born workers account for virtually all US labor force expansion, and deportations and other restrictive policies are adversely affecting a variety of industries.
Holiday retail spending estimates topped $1 trillion for the first time. Many consumers shopped sales and less pricey brands, but the season is still expected to produce solid, if not spectacular, numbers.
Many other events, including the government shutdown and ongoing geopolitical conflicts around the globe were also impactful, and much of the ultimate fallout remains to be seen. It is clear, however, that 2025 was quite a ride. Stay safe!
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Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 3,000 clients over the past four decades.
