Recession Talk — Why It Never Dies
Recession is like the ghost that never leaves the room. Even when the economy is booming, someone is whispering, “It’s coming…” And the truth is, fear always sells. People pay more attention to doomsayers than optimists.
But this time feels different. The U.S. economy is technically still growing — yet almost all the weight rests on a handful of tech giants riding the AI boom. Their earnings are carrying the entire market higher. If they stumble, the façade of broad growth could crack.
Meanwhile, the Fed is stuck. Raising rates risks choking growth. Cut rates and you risk re-heating inflation. Add tariffs and tax cuts to the mix, and it’s like driving with one foot on the gas and the other on the brake. For now, they’re coasting.
The Case For a Recession (Side A)
Mark Zandi — Chief Economist, Moody’s Analytics: Warns U.S. is flirting with recession due to Fed tightening and consumer weakness.
David Rosenberg — Founder, Rosenberg Research: Argues leading indicators (yield curve, credit spreads) still point to downturn.
Albert Edwards — Global Strategist, Société Générale: Warns U.S. faces a 'doom loop' from collapsing profits and job cuts.
Michael Wolf — Chief Economist, Deloitte: Says baseline is modest growth, but risks tilt strongly toward recession.
DonkeeJote — Reddit top Commentator: Recession talk can be self-fulfilling. If enough people believe it, they cut back spending, causing slowdown.
The Case Against a Recession (Side B)
Jan Hatzius — Chief Economist, Goldman Sachs: Cut recession odds to ~30%. Points to strong labor market and solid consumer demand.
JPMorgan Research: Sees ~40% probability of U.S. recession. But baseline is still continued growth.
The Conference Board: Does not forecast a recession in 2025. Expects growth to remain modest.
Pierre Dongo-Soria — Economist, IMF: Projects 'soft landing' as most likely scenario with slowing inflation.
Schroders Fixed Income Team: Argues U.S. economy is 'muddling through.' Growth is weak but not contracting.
The Numbers in Plain English
Recession warning signals:
Job Market Weakness: July 2025 added only 73,000 jobs, well below forecasts, with prior months revised sharply downward.
Industry-wide Layoffs: Over 53% of U.S. industries are cutting jobs — a classic early recession signal.
Bond & Federal Spending Pressure: Bond market turmoil plus tighter federal budgets could drive the U.S. into recession by Q4 2025.
Tariff & Trade War Risks: Escalating tariffs and retaliation create uncertainty.
Labor Market Data Revisions: Job growth near zero is flashing red as a leading indicator.
Probabilities from big models:
Oxford Economics: 35% chance of recession in 2025
Goldman Sachs: 30%
JPMorgan: 40%
New York Fed model: 28.9%
Data arguing against a recession:
Stock Market Resilience: S&P 500 up 8.3% YTD (as of Aug 2025) — investors still betting on growth.
Unemployment Stable: Jobless rate holding near 4.1–4.2%. which is relatively low
Consumer Spending Growth: Shoppers keep spending which is 2/3rd of US GDP
Revised Outlooks: UCLA Anderson & ITR Economics see no technical recession yet.
AI & Infrastructure Investment: Big money flowing into tech and construction is keeping momentum alive.
Fed’s GDPNow: Forecasts 2.5% growth in Q3 2025 — hardly a collapse.
The Bigger Fear — Already in Recession?
Here’s the uncomfortable truth: for many families, the recession isn’t something to forecast — it’s already here.
Parents are juggling bills, realizing paychecks don’t stretch like they used to.
First time after 2008, More sellers of real estate then buyers
Workers glancing at their inbox, worried the next layoff email has their name on it.
On paper, the economy grows. In reality, millions already feel like they’re living in a downturn.
Our Suggestion for Independent Investors
At Trade The Times, we believe this is not a FOMO market. The sidelines are where you sharpen your edge.
The market may move sideways for a long stretch.
That makes finding the right picks more important than chasing headlines.
This isn’t about being “right or wrong” — it’s about being diligent and deliberate.
What You Can Do Now
If you’re working: Build a small cash cushion. Layoff chatter is rising, and cash buys peace of mind.
If you’re investing: Stick to steady, quality businesses; don’t chase every hot stock.
If you’re saving for goals: Keep dollar-cost averaging — consistency matters more than timing the market.
The numbers are mixed. The experts are split. The headlines are loud.
If a recession really hits next quarter, what would you change in your life today?
Hit Reply and share your take — we’ll feature the sharpest answers in a future issue.