- Fears of a recession are top of mind amid Trump's trade wars and stock market dips.
- Trump's tariffs and economic policies have heightened uncertainty.
- Leading thinkers are keeping tabs on the topic. Here's who to read to keep up.
With dips in the stock market and President Donald Trump's escalating trade wars, recession fear is on everyone's mind.
There's been no official recession call yet for 2025, but economists and financial analysts told Business Insider that they are taking a close look at US employment rates, household income levels, and other indicators of economic health.
For American consumers, a financial downturn could mean widespread unemployment, decreased spending, and a decline in the value of assets like homes and retirement accounts, among other impacts.
Here's some of the most insightful commentary BI has seen on recessions — and tips on how to evaluate if we are in one.
Former Fed economist Claudia Sahm's "Stay-At-Home Macro" newsletter
DOGE has adopted a "move fast and break things" approach, which amplifies the recession risks in two key ways. First, it concentrates the economic effects temporally, and second, it creates uncertainty that can weigh on growth and employment…Will the next recession be the DOGE recession? Probably not, but the ingredients are there: mass layoffs of federal government workers, large cuts in government contracts and grants, a rapid pace, and heightened uncertainty about who will be affected.Economist Cristian deRitis on Moody's "Inside Economics" podcast
It's not as though I can, as an automaker or manufacturer, make long-term plans based on policy that's changing so rapidly. So the natural response to that type of uncertainty is to pause, is to pull back, and that could certainly lead to slower growth and even eventually recession if it starts to spiral out of control, right? If consumers start to really pull back on spending, businesses pull back on their hiring, on their employment, that leads to lower income, and so on and so forth. So I think there's a real risk here that the uncertainty injected by the tariffs, even beyond the tariffs themselves, could do some real economic damage.Economics professor Justin Wolfers
Two Reasons for Optimism About the Economy
While I'm convinced that our current recession talk is premature, I'm no blind optimist. America's biggest economic threat is the chaos sown by an unpredictable White House. Tariffs are on except when they're off; DOGE cuts with a chain saw and keeps hitting arteries; fiscal discipline has gone missing; and rule by executive order has left nearly the entire Trump agenda tied up in court. At the same time, Mr. Trump's whims are rewiring the postwar world order.If there's not something to scare you on that list, you're not paying attention. Perhaps this is the point in the horror movie when you wake up and realize that the real threat is coming from inside the house. Indeed, that fear may be what catalyzes the next recession. It just hasn't started yet.Former chief economist Jared Bernstein's newsletter
Trump Declined to Rule out a Recession! He's Right (Lutnick's Wrong).
Normal people just want to know how all this chaotic economic policy is affecting their lives, the prices they face, interest rates, jobs, and their living standards…if you want to worry more about recession, I'm with you, though the odds are still relatively low.Redfin chief economist Daryl Fairweather
Recession risk is rising, but how do I know if we're in a recession?
Fairweather wrote on Bluesky that in simple data, leading indicators of a recession include an inverted yield curve, stock market crash, weakening consumer and business sentiment, and rising unemployment claims, as well as more dire signs that come later like declining personal income and weakening GDP. She added that "some warning signs are flashing, but major recession indicators aren't confirming it yet."
Professor of Public Policy and former Secretary of Labor Robert Reich's newsletter
Over the weekend, Trump refused to rule out a recession this year, telling Fox News there will be a "period of transition, because what we're doing is very big."Well, yes, if "very big" means destroying much of the federal government, allying with Putin against our traditional allies, and putting high tariff walls around America.The cost of living — the single biggest problem identified by consumers over the last several years — is going up, not down. Trump's tariffs on steel and aluminum, and his threatened 25 percent tariffs on Canada and Mexico, are playing havoc with supply chains inside and outside America.Senior economist Dean Baker's column at the Center for Economic and Policy Research
The Trump-Musk Recession: Because They Can
And of course, we had the 2020 recession because of the COVID-19 pandemic. But now Donald Trump is threatening us with a recession — not because of something that is any way unavoidable, but rather because as president he has the power to bring on a recession.While a recession may not be fully baked into the cards at this point, the risk is evident and it's almost entirely coming from Donald Trump's policies. First and foremost are the costs associated with his import taxes (tariffs), or at least the threat of tariffs.Economic policy researcher Skanda Amarnath's column at Employee America
Narrow Job Gains vs Reversion Effects From Weather, Seasonals & Natural Disasters
On the other hand, we are expecting to see underlying slowing in sectors that have powered our narrow set of job gains, like healthcare, state and local government, social assistance, without much real "cyclical" sector offset. We are still dealing with a historically narrow job market in which only a narrow set of sectors are contributing to payroll growth, something you typically only see coincide with rising unemployment and recessions.
