U.S. News
Is a U.S. Recession Around the Corner? These Key Signals Say a Lot
By Jake Beardslee · May 7, 2025
Economic Uncertainty Grows Amid Trump’s Shifting Tariff Strategy
As President Donald Trump continues to recalibrate U.S. tariff policy, both Wall Street and Main Street are grappling with lingering economic uncertainty. Despite mixed signals from key economic indicators, speculation is mounting over whether the nation may be on the brink of a recession. The White House / Wikimedia
Goldman Sachs: 45% Chance of Recession Due to Tariff Risks
Goldman Sachs maintained its forecast of a 45% chance the U.S. will experience a recession within the next year. Chief economist Jan Hatzius warned of a “meaningful risk” that Trump’s paused reciprocal tariffs might still be enacted, triggering an “event-driven downturn.” Nicola Barts / Pexels
UBS Says Recession Can Be Avoided If Trade Tensions Ease
However, not all financial leaders are sounding the alarm. Solita Marcelli, UBS’s Chief Investment Officer for the Americas, expressed confidence that “a full-blown recession” can be avoided if trade deals are finalized and tariffs dialed back. Kaboompics.com / Pexels
GDP Dips in Q1, Raising Red Flags on Recession Thresholds
Economic performance in the first quarter was weak, with GDP slipping into negative territory for the first time since 2022. While the downturn may be skewed by factors like a surge in gold imports, economists say a second consecutive quarter of contraction would meet the textbook definition of a recession—though the National Bureau of Economic Research uses a broader, more subjective measure based on prolonged economic decline. Tumisu / Pixabay
Job Market Still Strong Despite Rising Recession Concerns
Labor market data offers a mixed picture. April saw better-than-expected job gains, and the unemployment rate stands at 4.2%, which remains historically healthy. Goldman Sachs projects a mild uptick to 4.7% by year’s end, but recession indicators like the Sahm Rule are not yet triggered. Ron Lach / Pexels
Recession Odds Split Across Wall Street Forecasts
Predictions on whether the U.S. will dip into recession vary widely. Apollo Global Management’s chief economist Torsten Slok sees a 90% chance of what he calls a “Voluntary Trade Reset Recession,” criticizing the Trump administration for poorly executing its trade vision. Meanwhile, JPMorgan Chase puts the risk at 60%, Morgan Stanley at 40%, and Bank of America remains cautiously optimistic. Vlada Karpovich / Pexels
Summers Predicts Recession With Steep Human Costs
Former Treasury Secretary Lawrence Summers gave grim odds in an April podcast, estimating “six in 10 or better that a recession will start this year.” He warned of potentially severe consequences, including 2 million additional unemployed Americans and a $5,000 or more drop in household income. geralt / Pixabay
Trump Officials Reject Recession Fears, Blame Biden-Era Lag
In contrast, Treasury Secretary Scott Bessent insisted Tuesday there is “nothing in the data that shows that we are in a recession.” National Economic Council director Kevin Hassett said in an interview with Fox Business last month that he is “100% not” expecting a downturn in 2025, citing stable CEO sentiment. Trump himself has dismissed the threat, attributing any potential slump to economic hangovers from the Biden era. The White House / Wikimedia
Gold Soars, Oil Falls as Investors Brace for Slowdown
Still, commodity markets reflect investor anxiety. Gold has surged more than 20% this year to a record $3,400 per ounce, while Brent crude oil fell to a three-year low, suggesting waning global demand. Zlaťáky.cz / Pexels