Experts warn that the odds of a recession in the United States may be increasing due to several key financial indicators. According to Bloomberg, U.S. consumer confidence has dropped the most since August 2021, sparking concerns about economic growth.
The Atlanta Federal Reserve model predicts negative economic growth in Q1 2025, while the New York Federal Reserve suggests healthy economic growth. However, experts disagree on whether these predictions indicate a recession.
Alex Jacquez, chief of policy and advocacy at Groundwork Collective, defines a recession as a significant decline in economic activity lasting more than a few months. He points to specific indicators, including consumers’ expectations of inflation, which can impact spending habits and the real economy.
Jacquez warns that if people are fearful about job security or layoffs, they will pull back on spending. The current indicators, such as a sharp decline in consumer confidence and soaring inflation expectations, suggest a downward trend.
Trump’s tariffs, including proposed reciprocal tariffs worldwide, have also contributed to economic uncertainty. Businesses are uncertain about the future, making it difficult for them to invest. Elon Musk’s cuts to government programs have sparked concerns about job losses and the economy.
While Trump has acknowledged some pain due to tariffs, Jacquez remains concerned. He believes that if he were still in the White House, he would be extremely worried about the trend of indicators across sectors of the economy.
The last U.S. recession occurred during the COVID-19 pandemic in early 2020, triggered by government restrictions and fear of the virus. However, the federal government enacted relief measures, which made the pandemic recession the deepest and shortest in post-World War II era history.
Source: https://time.com/7265290/is-the-us-heading-into-a-recession-under-trump-what-to-know