Tariffs placed by Donald Trump on China, Mexico and Canada have become the cause for concern about whether a recession is coming to the country. Now, many Americans are wondering just how likely a recession is—and what it would mean if the economy were to take a downturn.
GDP growth that has two consecutive quarters of negative real growth is often defined as a recession. GDP means the total of the value of goods and services made within a country over a given period.
However, the National Bureau of Economic Research (NBER) says a recession is a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
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What experts are predicting for the US economy
Goldman Sachs recently increased its odds of a US recession in the next year from 15% to 20%, per The Wall Street Journal. The firm warned that the likelihood could rise if the Trump administration remains “committed to its policies even in the face of much worse data.”
Meanwhile, J.P. Morgan Chase economists estimate the chances of a recession at 40%, citing “extreme U.S. policies,” according to Bloomberg.
{{/usCountry}}Meanwhile, J.P. Morgan Chase economists estimate the chances of a recession at 40%, citing “extreme U.S. policies,” according to Bloomberg.
{{/usCountry}}John Hancock Investment Management noted six key things that can happen during a downturn: rising unemployment, increased savings, decline in manufacturing and service decline, falling prices, lower interest rates, and higher government spending.
Is a US recession looming?
“I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing,” Trump said during an interview with Fox News.
“It takes a little time. It takes a little time. But I think it should be great for us.”
Treasury Secretary Scott Bessent echoed this sentiment in a CNBC interview, referring to an economic “detox period” as the country shifts from public to private spending.