By almost any measure, 2025 was a great year for the United States.
Despite inflation remaining elevated and the damage from new tariffs, the economy did well. Inflation-adjusted median earnings are higher than a year ago, though only by about 1.3%. While most prices are still rising, one bright spot for affordability is that home prices are falling in much of the country (according to Zillow estimates).
The unemployment rate did tick up slightly, from 4.2% last November to 4.6% currently. This is definitely an indicator to watch over the next few months, but it is still well below average.
But even outside of the economy, there is plenty of good news in the data. Crime rates are plummeting. The murder rate fell something like 20%, as well as every major category of crime (violent crime overall is down 10%). This are some of the largest one-year drops in crime the US has ever seen.
Homicides aren’t the only category of deaths that are falling in 2025. For most categories of death as tracked by the CDC, there is a long lag (6 months or more) before all of the deaths are categorized. So we can’t look at complete 2025 data yet. For example, drug overdoses have increased massively in recent years, especially during the pandemic. But after plateauing in 2021-23, drug ODs started falling in 2024 and have continued to fall in early 2025. For the 12 months ending in April 2025, drug OD deaths were 26% lower than the prior 12 months. If we look at just the first 5 months of the year, 2024 was 20% lower than 2023, and 2025 was another 20% lower than 2024. For the first five months of 2025, ODs are basically back down to the same level as 2018 and 2019. Motor vehicle deaths also increased during the pandemic, but they are down 8% in the first half of 2025, essentially back down to 2018-19 levels.
Was it all good news? No, you can certainly find some data to be pessimistic about. For example, despite the efforts of DOGE and other attempts to cut federal government spending, over $2 trillion was added to the national debt in 2025, up 6 percent from the end of 2024 and surpassing $38 trillion. And as I mentioned above with the unemployment rate, there is some evidence the labor market may be weakening.
Not all is rosy as we head into 2026, but 2025 was a year filled with many positive trends on the economic front and in society more generally. May your new year be prosperous and healthy!
Merry Christmas! I’m gifting you a couple ideas for money things to do in the remaining six days of 2025.
Ways to Help Yourself
Money in US Flexible Spending Accounts (FSAs) often disappears if not requested by New Year’s Day. Don’t forget to draw these down- especially it is a Dependent Care FSA, which can’t carry any money over to the new year. The money goes back to your employer if you don’t spend it, which means they don’t have an incentive to remind you themselves; so I’ll remind you to save you from having to go Krieger.
The next few days are also your last chance to do most tax-deductible spending in 2025, which could be business expenses, or contributing to tax-deductible accounts that don’t expire like a 401k or HSA (not FSA). See a more detailed list of tax ideas here. Depending on your situation (especially whether you itemize), this might also be a good time to make tax-deductible donations, which would:
Help Others
There are many good causes to donate to, but funding high-value low-cost health interventions in poor countries was probably the cheapest reliable way to save a life even before this year. When one of the largest funders of global health, USAID, was shut down this year, the marginal benefit of donations to global health likely went even higher. Givewell does the cost-effectiveness calculations to identify good options for specific charities in this area, like Helen Keller International. I like that I’ve been donating to these charities for years via Givewell’s donation portal and none of them have ever called me (since they don’t require a phone number) or mailed me anything.
This picture shows all the remains of the website of USAID, an agency that spent $32 billion in FY 2024
Academics generally agree on the changing patterns of mortality over time. Centuries ago, people died of many things. Most of those deaths were among children and they were often related to water-borne illness. A lot of that was resolved with sanitation infrastructure and water treatment. Then, communicable diseases were next. Vaccines, mostly introduced in the first half of the 20th century, prevented a lot of deaths.
Similarly, food borne illness killed a lot of people before refrigeration was popular. The milkman would deliver milk to a hatch on the side of your house and swap out the empty glass bottles with new ones full of milk. For clarity, it was not a refrigerated cavity. It was just a hole in the wall with a door on both the inside and outside of the house. A lot of babies died from drinking spoiled milk.
Now, in higher income countries, we die of things that kill old people. These include cancer, falls that lead to infections, and the various diseases related to obesity. We’re able to die of these things because we won the battles against the big threats to children.
What prompts such a dreary topic?
I was perusing the 1870 Census schedules and I stumbled upon some ‘Schedule 2s’. Most of us are familiar with schedule 1, which asks details about the residents living in a household. But schedule 2 asked about the deaths in the household over the past year. Below is a scan from St. Paul, Minnesota.
Given where we are starting from, the average American would probably be satisfied with a fairly low bar, like “not obese” or “can run a mile without stopping”. But the kind of person who writes about the topic a lot tends to be a fitness nut insisting on crazily high standards. So what makes for a reasonable middle-ground measure?
I think the US military’s standards do. They vary by branch and are changing, but here are some previous military fitness standards from the Air Force:
Pushups and sit-ups arehow many can be done in one minute
Here’s what the Marines expect from recruits before they show up for training:
The Army has a complex points system that varies by age and gender, but their minimum standards for a 20-year-old Male include: hex bar deadlift 150 lbs for 3 reps, 15 hand-release pushups within 2 minutes, plank for a minute 30, and a 2 mile run in 19:57 (plus their own sprint/drag/carry test in 2:28).
I like that the standards all involve a mix of strength and speed, and that they might take some work but should be achievable in a reasonable amount of time for a healthy person. I also like that they give stretch goals for the over-achievers in addition to their minimums.
What about the real over-achievers, the ones who want to be not just “in shape” but “in great shape” or “in excellent shape”? For them, there are the special forces fitness tests. Here’s the Green Berets:
I’m in no way an authority on any of this, but for what it’s worth, you have my permission to say you’re in shape if you can meet any branch’s minimum requirements.
Formerteammates of athletes who died of CTE would require $6 million to offset this disamenity and $1million to be indifferent between exiting and staying in the profession.
So concludes a paper by Josh Martin. I thought this paper would be about a small group, since CTE deaths mostly happen among long-retired players with few or no former teammates still playing. But it turns out there were a fair number of early deaths, and each player had many teammates who can be affected, totaling 23% of NHL players and 14% of NFL players:
But teams mostly won’t pay worried players enough extra to stay, especially in hockey. So many of them retire early:
Athletes who were teammateswith a former teammate who died with CTE for three or more years and played for a team withthem at least two years before their death are 7.22 percentage points more likely to retire thancharacteristically similar non-treated players in the same years. Relative to the pre-treatmentmean, this represents a 69% increase.
People still respond to incentives though, and if you do pay them enough they mostly take the risk and stay:
The remaining players will take measures to protect themselves, like skipping games to recover from concussions:
Michael previously pointed out here that these concerns matter more for certain positions, like running backs:
If you want millionaires to show up every week to willingly endure the equivalent of a half-dozen car accidents, you’re going to have to pay them.
This all makes for a good illustration of the theory of compensating differentials, which is sometimes surprisingly hard to observe in the labor market. But sports tend to have the sort of data we can only dream of elsewhere. Which other workers have millions of people observing, measuring, and debating their on-the-job productivity and performance?
This summer I was one of thousands of people crowding into Foxborough just to watch them practice:
The NFL season kicks off today, and I say the players deserve the millions they are about to earn.
The Affordable Care Act was supposed to make it easier for American workers to switch jobs by making it easier to get health insurance from sources other than their current employer. Mostly it didn’t work out that way. But a new paper finds that one piece of the ACA actually made people less likely to switch jobs.
The ACA Dependent Coverage Mandate required family health insurance plans to cover young adults though age 26, when prior to the 2010 passage of the ACA many had to leave the family plan at age 18 or 19. I thought these newly covered young adults would be more likely to switch jobs or start businesses, but there turned out to be absolutely no effect on job switching, and no overall increase in businesses (though it did seem to increase the number of disabled young adults starting businesses, and other parts of the ACA increased business formation among older adults).
But while the Dependent Coverage mandate seems not to have reduced job lock for young adults, it increased job lock among their parents. That is the finding of a new paper in the Journal of Public Economics by Hannah Bae, Katherine Mackel, and Maggie Shi. Using a large dataset with exact months of age and coverage, MarketScan, allows them to estimate precise effects:
We find that dependents just to the right of the December 1985/January 1986 cutoff—those eligible for longer coverage—are more likely to enroll and remain covered for longer once the mandate is in effect. Dependent enrollment increases by 1.8 percentage points at the cutoff, an increase of 9.2 % over the enrollment rate for dependents born in December 1985. In addition, the enrollment duration increases by 9.7 days (14.6 %). Turning to their parents, we find that parental job retention likelihood increases by 1.0 percentage point (1.8 %) and job duration increases by 5.8 days (1.6 %) to the right of the cutoff. When scaled by the estimated share of dependents on end of year plans, our findings imply that 12 additional months of dependent coverage correspond to a 7.7 % increase in job retention likelihood and a 7.0 % increase in retention duration.
I believe in this parental job lock effect partly because of their data and econometric analysis, and partly through introspection. I plan to work for years after I have the money to retire myself in order to keep benefits for my kids, though personally I’m more interested in tuition remission than health insurance.
On top of working longer though, benefits like these enable employers to pay parents lower money wages. A 2022 Labour Economics paper from Seonghoon Kim and Kanghyock Koh found that the Dependent Coverage Mandate “reduced parents’ annual wages by about $2600 without significant reductions in the probability of employment and working hours.” But at least their kids are better off for it.
Iowa recently joined the growing list of states where midwives or obstetricians can open a freestanding birth center without needing to convince a state board that it is economically necessary. The Des Moines Register provides an excellent summary:
A Des Moines midwife who sued the state for permission to open a new birthing center may have lost a battle in court, but ultimately, she has won the war.
Caitlin Hainley of the Des Moines Midwife Collective sought to open a standalone birthing center in Des Moines, essentially a single-family home repurposed with birthing tubs and other equipment needed to give birth in a comfortable, home-like environment.
To do so, the collective alleged in its 2023 lawsuit, would have required going through a lengthy, expensive regulatory process that would give already established maternity facilities, such as local hospitals, the chance to argue against granting what is known as a certificate of need for the new facility, essentially vetoing competition.
A federal district judge ruled in November that Iowa’s certificate-of-need law is constitutional, finding that legislators had a rational interest in protecting existing hospitals and health care providers.
But while losing the first round in court, the collective’s cause was winning support in a more important venue: the Iowa Capitol. Iowa legislators in their 2025 session passed a bill, which Gov. Kim Reynolds signed on May 1, removing birth centers from the definition of health facilities covered by the certificate-of-need law. The law will formally take effect July 1.
I’m honored to have played a small part in this as the expert witness in the lawsuit.
If you’d like to get involved in making sure birth options are available your state, a great place to start would be to attend the Zoom seminar Roadmap For Reform: Advancing Birth Freedom on July 23rd. It is hosted by the Pacific Legal Foundation, which represented the midwives pro-bono in the Iowa case.
There is strong momentum here with Connecticut, Kentucky, Michigan, Vermont, and West Virginia also recently repealing Certificate of Need requirements for birth centers, but a variety of other barriers remain. States often require freestanding birth centers to obtain a transfer agreement with a nearby hospital before opening to ensure that the hospital will take their emergency cases, even though hospitals are legally required to take all emergency cases. The problem is that hospitals provide both complementary services (emergency care) and substitute services (labor and delivery), and they often choose not to sign transfer agreements in order to prevent competition from a partial substitute. This whole area would benefit both from more academic study, as well as more investigation from antitrust enforcement.
But for today, congratulations to Caitlin Hainley and to Iowa on their victory.
According to the U.S. Department of Agriculture, feral hogs cause approximately $2.5 billion in agricultural damages each year…Nearly 300 native plant and animal species in the U.S. are in rapid decline because of feral swine, and many of the species are already at risk, according to Animal and Plant Health Inspection Service. The swine also carry at least 40 parasites, 30 bacterial and viral illnesses, and can infect humans, livestock and other animals with diseases like brucellosis and tuberculosis.
…They will also feed on tree seeds and seedlings, causing significant damage in forests, groves and plantations… Rooting — digging for foods below the surface of the ground — destabilizes the soil surface, uprooting or weakening native vegetation, damaging lawns and causing erosion. Their wallowing behavior destroys small ponds and stream banks, which may affect water quality. They also prey upon ground-nesting wildlife, including sea turtles. Wild hogs compete for food with other game animals such as deer, turkeys and squirrels, and they may consume the nests and young of many reptiles, ground-nesting birds and mammals.
Pigs are smart (ahead of dogs and horses), tough, and adaptable, and they breed very quickly. The protected, overfed, calm hogs you see on farms quickly turn lean and mean if they have to fend for themselves in the wild. You pretty much only see female pigs or castrated males on the farm, since whole males (boars) are intrinsically aggressive and destructive. But vigorous 200-pound boars, with their 3 inch-long, razor-sharp tusks, are well-represented in feral swine.
This is a growing problem. The population of wild pigs in the southern third of the U.S. has increased significantly in the past few decades. There have historically been some wild pigs in spots like Florida and Texas, escapees from Spanish settlers long ago. But they seem to be spreading northward, largely because hunters transplant them:
From 1982 to 2016, the wild pig population in the United States increased from 2.4 million to an estimated 6.9 million, with 2.6 million estimated to be residing in Texas alone. The population in the United States continues to grow rapidly due to their high reproduction rate, generalist diet, and lack of natural predators. Wild pigs have expanded their range in the United States from 18 States in 1982 to 35 States in 2016. It was recently estimated that the rate of northward range expansion by wild pigs accelerated from approximately 4 miles to 7.8 miles per year from 1982 to 2012 (12). This rapid range expansion can be attributed to an estimated 18-21% annual population growth and an ability to thrive across various environments, however, one of the leading causes is the human-mediated transportation of wild pigs for hunting purposes.
As for pigs attacking and killing humans, a definitive study was recently made in 2023 by Mayer, et al., covering 2000-2019. This report includes informative tables and charts, such as:
and
Comparison of mean annual number of human fatalities from attacks by various wild animals for time periods ranging between 2000 and 2019. From Mayer, et al.
About half of these fatalities occurred in rural regions of India. Government policies there prohibit farmers from killing marauding pigs, so farmers try to chase them away from their fields with rakes and stones. Sometimes that provokes the pig to attack, slashing at thigh level and often lacerating the femoral artery. But a disturbing 39% of deadly attacks were unprovoked, including a horrific case with an elderly woman in Texas. So danger to humans is an issue, though for perspective, far more people are killed each year by snakes (100,000), rabid dogs (30,000), and crocodiles (1000). In the U.S., over 100 people are killed a year, and 30,000 injured, by collisions with deer (see here for a market-based solution for this problem).
What to do? Hunters in many states are free to blast away at feral pigs year-round, since they are considered a harmful, invasive (non-native) species. Paradoxically, however, allowing hunting of pigs can be counterproductive: amateur hunting does not eliminate enough pigs to stop their spread, and it incentivizes hunters to transport pigs to new regions to make for more targets. For instance, Arkansas allows hunting and even transport of pigs, and has seen swine populations skyrocket. The state of Missouri, next door, took the enlightened approach of banning hunting and transport, leaving population control to wildlife professionals. By removing the sport-hunting incentive, Missouri removed the incentive to transport them, which stymied their spread.
To control pig populations, the pros mainly set up baited large corrals, and monitor them remotely with webcams. After several weeks, the local pigs get comfortable coming there to feed. When the cameras show that every single pig in the herd is in the corral, the gate is sprung shut remotely. Then the pros drive out to, er, euthanize the pigs. The goal is to wipe out the entire herd, and leave no sadder-but-wiser survivors who will be harder to catch next time. Once a hog population has become established in an area, it typically takes ongoing eradication efforts to keep the numbers down.
If you want to do your own part to reduce the surplus swine population, the following notable opportunity came to my attention: for a largish fee the Helibacon company will train you in firing automatic weapons and take you up in a chopper where you can mow down a marauding herd in the low Texas scrubland. It sounds like a guy thing, but Helibacon reminds us that full auto is for ladies, too. See also PorkChoppersAviation for similar service.
This is actually a fine example of a free market solution to a problem: wild hogs were such a problem for landowners that they were paying expensive professional helo hunters to take out herds, but in Texas, “All that changed in 2011, when the state legislature passed the so-called pork chopper law, which allowed hunters to pay to shoot feral hogs out of helicopters – and a new business model was born.” Hunters are happy to pay to hunt, helo companies are happy to take their money, and landowners are happy to have pigs reduced for free. Voila, voluntary exchange creates value…
A reporter recently told me she thought there is a national trend toward hospitals issuing more bonds. I tried to verify this and found it surprising hard to do with publicly available data. But once I had to spend an hour digging through private Compustat data to find the answer, I figured I should share some results. Here’s the average debt in millions of companies by sector:
Source: My graph made from Compustat North American Fundamentals Annual data collapsed by Standard Industrial Classification code into the Fama-French 10 sectors
This shows that health care is actually the least-indebted sector, and telecommunications the most indebted, followed by utilities and “other” (a broad category that actually covers most firms in the Fama-French 10). But are health care firms really more conservative about debt, or are they just smaller? Let’s scale the debt by showing it as a share of revenue:
My graph made from Compustat North American Fundamentals Annual data collapsed by SIC code into the Fama-French 10 sectors(dltt/revt).
It appears that health care firms are the most indebted relative to revenue since 2023. But which parts of health care are driving this?
Hospitals in 2023 followed by specialty outpatient in 2024. However, seeing how much the numbers bounce around from year to year, I suspect they are driven by small numbers of outlier firms. This could be because Compustat North America data only covers publicly traded firms, but many sectors of health care are dominated by private corporations or non-profits.
I welcome suggestions for datasets on the bond-market side of things that are able to do industry splits including private companies, or suggestions for other breakdowns you’d like to see me do with Compustat.
The United Healthcare Group (UNH) is a gigantic ($260 B market cap, even after recent dip) health plan provider, which until recently seemed to be the bluest of blue-chip companies. It is a purveyor of essential medical services with a wide moat, largely unaffected by tariff posturing, and considered too big to fail. The ten-year stock price chart shows it steadily grinding up and up, shrugging off market tantrums like 2020 and 2022, and even the tragic gunning down of one of its division presidents in December.
But things really unraveled in the past month. Let’s look at the charts, and then get into the underlying causes.
The year-to-date chart above shows the price hanging around $500, then rising to nearly $600 as the April 17 quarterly earnings report approached. Presumably the market was licking its chops in anticipation of the usual UNH earnings beat. The actual report was OK by most corporate standards, but it failed to match expectations. Revenue growth was a hearty +9.8% Y/Y, but this was $2.02B “miss”. Earnings were up 4% over year-ago Q1, but they missed expectation (by a mere 1%). What was probably much more disturbing was guidance on 2025 total adjusted earnings down to $26 to $26.50 per share, compared to $29.74 consensus.
That took the stock down from $600 to around $450 immediately, and then it drifted below $400 in the following month as investors looked for and failed to find better news on the company. But then two things happened last week. The effects are seen in the 1-month chart below:
On May 13 (blue arrow) the company came out with a stunning dual announcement. It noted that the recently-appointed CEO, Andrew Witty, had suddenly resigned “for personal reasons.” The blogosphere speculated (perhaps unfairly) that you don’t suddenly resign from a $25 million/year job unless your “personal reasons” involve things like not going to prison for corporate fraud. The other stunner was that the company completely yanked 2025 financial guidance, due to an unexpected rise in health care costs (i.e., what they must pay out to their participants). Over the next day or two, the stock fell to about 50% of its value in early April.
Then on May 14 the Wall Street Journal came out with an article claiming that the U.S. Department of Justice is carrying out a criminal investigation into UNH for possible Medicare fraud, focusing on the company’s Medicare Advantage business practices. The WSJ said that while the exact nature of the allegations is unclear, it has been an active probe since at least last summer.
UNH promptly fired back a curt response to the “deeply irresponsible” reporting of the WSJ:
We have not been notified by the Department of Justice of the supposed criminal investigation reported, without official attribution, in the Wall Street Journal today.
The WSJ’s reporting is deeply irresponsible, as even it admits that the “exact nature of the potential criminal allegations is unclear.” We stand by the integrity of our Medicare Advantage program.
The stock nose-dived again (red arrow, above), touching 251, as investors completely panicked over “Medicare fraud.” Cooler heads promptly started buying back in, leading to substantial recovery. That includes the new CEO, Steven Hemsley, who was the highly-paid CEO from 2009 to 2017, and since then has been the highly-compensated “executive chairman of the board”, a role created just for him. Pundits were impressed that he stepped in to buy some $25 million of UNH stock near its lows, saying wow, he is really putting some skin in the game. Well, not really: the dude is worth over $1 billion (did I mention high compensation of health care execs?), so $25 mill is hardly heroic. He is already up some 12% or a cool $3 million on this purchase, a tidy little example of how the rich become richer.
Economist Writing Every Day 