The "Pain Index" in the United States (unemployment rate + inflation rate) is expected to fall back to 7.1% by the end of 2025, which seems good—indeed surpassing 76% of the past 50 years. But there are big troubles lurking beneath.

Economists are ringing alarm bells. This index jumped from 5.2 in 2019 before the pandemic directly to 7.4, a 42% increase. Even more frightening is that this upward trend pattern is exactly the same as during the period from 1966 to 1982 when the market frequently crashed—back then, the index surged from 5.5 to 16. And during the 37 years from 1982 to 2019, the index remained steady at 5.5, with the market relatively calm. The current trend more closely resembles a replay of that turbulent period.

Options traders have already caught the scent; they are pricing in an 8-10% probability of the S&P 500 plummeting over 30% in 2026. This is not a small probability.

Looking further ahead is even more painful. The Congressional Budget Office predicts the unemployment rate will rise to 4.6%, while the Conference Board suggests inflation could rebound over 3%. Combining these two, the Pain Index is likely to surge above 8.0. History shows that once the index breaks above 8 and continues climbing, the risks of recession and market crashes increase significantly.

There’s also a hidden reality behind the numbers: the economic pressure on wage earners without college degrees far exceeds the national average. The rising trend of "despair deaths" is concrete evidence of this structural inequality.