As the Trump Administration introduces new policies, many worry that the U.S. economy may fall into a recession. However, there is evidence to contradict this. Before exploring these possibilities, it is important to understand what a recession is and how the government might respond.
What does is a recession? A recession is a period during which economic activity significantly declines. The decline can be measured as reduced consumer spending, lower employment rates, and business cost cuts. These are considerable drawbacks in our fast-paced economy.
Why are fears of a 2025 recession growing? The last recession that affected the U.S. was in 2007 and lasted two years. While it was not as damaging to the economy as the Great Depression, the path to recovery was slow: by May 2014, the U.S. finally regained its pre-recession employment level of 138.8 million jobholders. During this Great Recession, levels of unemployment peaked at almost 10% in 2010 before coming back down to an average of 6.2% in 2014. Despite this, almost a decade later, many Americans fear another recession.
Why are recession concerns persisting? According to CNN’s article by Alicia Wallace, President Trump cannot completely rule out the possibility of a recession. He stated that, “the administration’s sweeping policies — including steep tariffs, mass deportations and drastic cutbacks in federal employment and spending — would be ‘worth it,’ even if they trigger a recession.” This leads to the conclusion that, despite worried citizens and businesses, the administration does not plan on reversing its course.
How does the administration plan to handle it? As previously mentioned, President Trump believes that the short-term pain of the recession would be justified by long-term economic gains. According to The New York Times, the administration is “looking to reduce imports, bring back manufacturing jobs and ‘re-industrialize’ the American economy. They argue that even if doing so requires higher prices in the short run, American workers will win out in the end.” However, critics point out that the administration has yet to provide a detailed recovery plan.
Although the U.S.’s chances of going into a recession have increased by 20% (bringing it up to 40%), according to J.P. Morgan Research, the country is still not on the brink of a recession. As such, experts recommend being on alert for decreasing trends in employment rates and stock market values in case of a 2025 recession.
Sources:
Trump seems to think America needs a recession. Some people are still recovering from the last one | CNN Business
The Great Recession and Its Aftermath
Recession Watch 2025 | UCLA Anderson School of Management
Trump Says a Recession Might Be Worth the Cost. Economists Disagree.
What Is the Probability of a Recession? | J.P. Morgan Research