Economists at Goldman Sachs have raised their assessment of the odds the U.S. will experience a recession — where the economy shrinks and unemployment rises — to 45%, from 35%. Other economists are raising similar alarms, with JPMorgan putting the odds of a recession at 60% and projecting inflation will reach 4.4% by the end of this year, up from 2.8% currently.
Here’s a few things to know about recessions and how they work:
Are there any signs a recession is imminent?
Not yet. But one development that has sparked widespread fear is a real-time economy tracker maintained by the Federal Reserve’s Atlanta branch. As of Monday, it was indicating that the economy could shrink by 0.8% at an annual rate in the first three months of this year, down from 2.4% in last year’s final quarter.
What signals would suggest that a recession has begun?
The clearest signal would be a steady rise in job losses and a surge in unemployment. The government’s weekly report on the number of people seeking unemployment benefits, which is released every Thursday, is being closely watched for signs of rising layoffs. So far, applications for aid remain quite low by historical standards.
What are Trump and his officials saying?
President Donald Trump doubled down on his global tariffs Thursday, likening the U.S. economy to a ‘very sick’ patient who came out of an operation. “It’s gonna be a booming country, very booming country. It’s going to be amazing, actually,” Trump said to reporters aboard Air Force One on his way down to one of his Florida golf clubs.
On Sunday, Trump told reporters that “sometimes you have to take medicine to fix something.” Yet Treasury Secretary Scott Bessent on the same day said “there doesn’t have to be a recession” and that the administration is focused on “building the long-term economic fundamentals for prosperity.”
▶ Read more about how to watch for a recession
