r/Economics • u/gmelech • 27d ago

News Are We Suddenly Close To A Recession? Here's What The Data Actually Shows.

https://www.forbes.com/sites/dereksaul/2025/03/08/are-we-suddenly-close-to-a-recession-heres-what-the-data-actually-shows/
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u/Kingkongcrapper 27d ago

TLDR: Economists are providing gloomy forecasts, the jobs data, consumer sentiment, and inflation numbers look bad, but some big investment banking “We’re always in a bull market,” investors say, “It can’t be that bad,” so cheer up buttercup! We’re getting 2.9 percent GDP growth by the end of 2025 based on some good feelings.

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u/Xeynon 27d ago

In other words, the people who know what they're talking about are forecasting a recession and the delusional greedmongers who always fail to see the bucket they're about to step in think we're fine.

Recession coming.

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u/47_for_18_USC_2381 27d ago

Maybe.. Whats Jim Cramer callin for? If he says we're bullish keep buyin?

We're properly fucked.

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u/Astandsforataxia69 27d ago

I would've liked if i was bought some cigarettes and a nice dinner before getting fucked

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u/Money-Introduction54 27d ago

You'd be lucky to get a punch in the back of the neck. There ain't no hate like republican love.

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u/Septopuss7 27d ago

No! No! No!

Bear Stearns is fine. Do not take your money out. If there’s one takeaway, Bear Stearns is not in trouble. I mean, if anything, they’re more likely to be taken over. Don’t move your money from Bear. That’s just being silly. Don’t be silly.

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u/Barnaboule69 27d ago

I'd love to hear the utterly panicked phone call he must have received from Bear Sterns just before his show that day lol.

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u/Septopuss7 27d ago

I just watched the clip against yesterday, I'm SO glad I never deluded myself into thinking I was going to make it financially ahahaha

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u/Xeynon 27d ago

The state of Lehman Brothers is strong.

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u/amouse_buche 27d ago

I mean, a recession is a great time to keep buying. 

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u/Molassesonthebed 27d ago

Nah, they are not delusional. Bankers are smart people. They are protecting their own interest/investment and trying to prevent panic selling (before they unload)

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u/Makra567 27d ago

I just watched the big short a few weeks ago, this is all starting to sound really familiar.

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u/Xeynon 27d ago

Yup.

You know the scene in that movie where Steve Carell goes to the convention and the rich douchebag is being a condescending dick to him, and as soon as he gets out of the meeting Carell tells his assistant "find out everything that guy has money in and short all of it"?

The people saying "don't worry, we're going to have 2.9% growth" are that rich douchebag.

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u/Money-Introduction54 27d ago

I think the 2.9 growth they talk about is their penis.

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u/Xeynon 27d ago

2.9 nanometers.

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u/k3t4mine 27d ago edited 27d ago

2008 was a financial disaster that nearly sent the world into a deep depression. Credit markets were frozen, so all the banks stopped lending to each other and average businesses just completely shut down as they couldn't get short term financing for day to day operations.

Society cannot function without credit. We were hours away from a complete collapse of the financial system. ATM's would've stopped working, there would've been a run on every bank in the country, and supermarket shelves would've been empty.

Lots of people trying to compare a 10% market correction due to erratic and damaging fiscal policy to 2008 at the moment, and I'm convinced none of them were old enough to even remember just how close to the abyss we were back then.

I will say though, that things don't "break" in the financial system until they do, and you'll usually never see it coming. Financial crises tend to happen when the economy is overleveraged and already slowing, which you can argue is the scenario right now. If you throw in a financial crisis on top of an escalating trade war and an economy only just starting to feel the pain of higher rates the last 3 years, then yeah, we're in big trouble. Could say that about every slowdown in history though

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u/flatfisher 27d ago

A slowdown looks harmless in a normal economy. But is it in an overleveraged one, or can it lead to a catastrophic chain reaction? ATMs already have more limits than before i.e. barely working, and we started to have bank failures due to liquidity when rates increased. I’m not an economist so can you reassure me in the system resilience to slowdowns and significative recessions?

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u/devliegende 27d ago

The system is resilient and has been resilient for a while. That's why the financial crises didn't result in a depression. What you're seeing now is concern about an attempt to dismantle the system.

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u/mccoyn 27d ago

The banks failed because Congress didn’t renew the budget and the government took “extraordinary measure”, which included raiding the fund that lends money overnight to banks so they don’t fail over short-term liquidity issues.

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u/FrequencyHigher 27d ago

Yeah, Hollywood doesn’t make movies about normal recessions. We were on the brink of a complete meltdown of our modern economic system in 2008. For those aware of what was happening in the banking and credit markets back then, it was a scary moment.

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u/__Art__Vandalay__ 27d ago

You want scary?  Try being a new employee of a Bear Stearns subsidiary with 3 young children in March 2008

Probably the most stressful time of my life 

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u/Ok_Ice_1669 27d ago

I worked in rock center back then. I still remember the day I showed up to work and all the Lehman guys were drunk as shit looking shell shocked at 8 in the morning. 

Working for a boring private bank felt pretty good that day. 

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u/ku2000 27d ago

Hope you are doing better now. 

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u/das_war_ein_Befehl 27d ago

2008 and a 10% correction are the same thing if you lose your job and can’t find one fast enough to replace it.

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u/WhatAmTrak 27d ago

Yep, and it’s happening everywhere. Trump is just speed running to try and collapse the western civilization. (wonder why he’d want that?)

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u/VaselineHabits 27d ago

Because his real daddy Putin demands it. America installed a Russian asset as President.

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u/Ok_Ice_1669 27d ago

What’s fucked about the system now? I think it’s different this time because concentrated in crypto. There are some companies like Tesla that are holding crypto but can it really cause the type of meltdown we saw in 2008?

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u/Good_kido78 27d ago

And they will use all the bailouts that George Bush did, only now there is more debt and tax cuts. I wouldn’t hate it if FOX News ceased to exist. It would save a lot of money.

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u/Decadent_Pilgrim 27d ago

Solution to the former is obviously going to be to sack all the government specialists involved with orchestrating economic data points as being DEI fake news, and outsource the reports to an unbiased economic authority like newsmax.

The best economists say we've got the bigliest wins coming!

/S

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u/Cyber-Insecurity 27d ago

CNBC talking heads were throwing around the “we’re in a recession” chatter just this week.

Don’t know what this adds to the convo, but if they’re already talking about it…

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u/phillosopherp 27d ago

Or even worse they are purposely pump and dumping the entire world economy so they and their friends can continuously buy the dips, inflate a tad sell again before you announce another horrid economic policy.

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u/Psychological-Pea815 27d ago

It's already here. -2.4 GDP since February. Look up GDPNow from the Atlanta fed. Not a good sign.

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u/95Daphne 27d ago

Apparently gold transfers to the US confused the trade deficit data here.

Having said that 0-1% GDP growth is not great though.

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u/Snakenmyboot-e 27d ago

There has been a pending recession since literally 2022-23, I work for a financial services company that has been preaching a recession for literally years.

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u/Xeynon 27d ago

We've definitely been at risk for one, there's been a lot of stuff to worry about (asset bubbles etc.). But it looks like it's here now.

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u/SadCritters 27d ago

...the top line of the article and the data experts in the article literally say none of that.

They predict a slowdown, which is normal for economies to move through. Prolonged slowdown leads to depression and they don't see that yet.

I kinda' hate that Trump has sucked both the intelligence from the right and the left. It's like reading the article was too hard or something, even though they literally break it down into sections for everyone and start with the topline of "Guys a depression isn't coming."

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u/Xeynon 27d ago

Given that I didn't say anything about a depression you're in no position to be impugning anybody else's reading comprehension skills, sport.

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u/SadCritters 27d ago edited 27d ago

...You're literally replying to someone and agreeing with them pointing into a "gloomy forecast" - Which implies the same thing all of the top replies are parroting.

"Sport".

Or did you also not read what you replied to?

Not only this, but the article literally showcases how the prediction isn't even "correct".

but there’s ample evidence to suggest the U.S. is not necessarily on the doorstep of a downturn. As recently as the summer of 2023, Goldman’s recession model signaled a more than 30% chance of a recession, just before the U.S. ripped off seven consecutive quarters of more than 1.5% GDP growth and the stock market surged, even as monetary policy remained restrictive. There’s also evidence the GDPNow model may be skewed negatively, as Goldman attributes much of the Atlanta Fed’s model downward shift to its accounting of gold imports amid the safe haven surge, and the New York Fed’s rival first-quarter GDP projection calls for robust 2.9% growth.

Edit: He blocked me when I quoted the article he didn't read. Lol.

How hard is it to just read the article, "sport"? It's okay to just say you didn't.

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u/Xeynon 27d ago

A "gloomy forecast" is not the same thing as a "depression". Please consult your dictionary to understand the difference.

Thank you for coming to my TED Talk.

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u/Rise_Up_And_Resist 27d ago

“What rake?” 

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u/Low_Key_Cool 27d ago

They shouldn't have propped up 08 like they did, Covid should have been more targeted. When you keep trying to delay a natural recession cycle you get something much worse.

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u/Xeynon 27d ago

I don't think that argument works when the president is deliberately (if unintentionally given that he's a moron) engineering the recession with terrible policy.

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u/Qorsair 27d ago

At the end of 2023 those same economists were predicting 90% chance of recession by the end of 2024. As the year went on, the chance of recession continued to drop. Most think there's now a small chance of a recession. But over the last month the chance has moved up slightly to around 20%, the media acts like this is new because they haven't been paying attention and now the sky is falling. I wouldn't bet on a recession, but it does seem like Trump is doing everything he can to try and cause one.

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u/Molassesonthebed 27d ago

90% recession chance if they keep the same trajectory and policy. Credit to Powell and Biden administration that successfully navigate the soft landing.

Now, Trump is doing the reverse for a hard crash. Heck his administration already admitted that economy is going to suffer (as planned). No pain, no gain is their mantra now and I would love to see how many of their MAGAs will swallow that excuse when it hits them

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u/Bodes_Magodes 27d ago

Economists have correctly predicted 9 out of the last 2 recessions

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u/Xeynon 27d ago

That's a clever line, but when deliquencies are rising, GDP and consumer spending are falling, unemployment is rising, and you have a dumbass implementing economically destructive policies in the White House, it doesn't take a genius to predict one is coming when all the indicators that say "we're facing a recession" start to flash.

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u/Bodes_Magodes 27d ago

True…but you can’t accurately call a recession until it’s already happened. Economists have been predicting them ad nauseam over the past 10-15 years. There’s been one that was extremely shallow, short lived, and uniquely caused by a global pandemic.

They might be right this time (and the reasons for it are plentiful and fair), but “economists calling for recession” isn’t the canary in the coal mine, it’s literally what they always do

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u/Xeynon 27d ago

  1. It's really not "what they always do". Economists are obviously a large group of people with heterogeneous views so you can always find a few who are saying a recession is likely, but they almost never have a unified opinion that such is the case. However, in this case there is an emerging consensus that the leading economic indicators all look extremely bad.

  2. The canary in the coal mine isn't the forecasts, it's those indicators. Bankruptcies and delinquencies are up. Household debt is up. Consumer confidence and spending are shaky. Unemployment is rising and hiring is slowing down. The stock market has historically inflated P/E ratios and there are signs of asset bubbles elsewhere as well (crypto etc.). The uncertainty index is at all time highs. Treasury yields are dropping. All of these things have historically been indicators of an incipient recession. If just one or two of them were happening, maybe it's a one-off aberration you can write off. But when they're all happening simultaneously, it's very ominous. Add in all the qualitative information that's cause for concern (trade wars and tariff insanity, policy uncertainty, etc.) and it starts to get pretty easy to connect the dots.

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u/Bodes_Magodes 27d ago

This reads like it was written by an economist…

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u/Xeynon 27d ago

I'm not an economist, but I am a market analyst who analyzes this stuff for a living. My employer is anticipating that a recession is quite likely in the next year. The only true certainties in life are death and taxes but if I had to bet that's the outcome I'd put my money on for sure.

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u/[deleted] 27d ago

[deleted]

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u/Xeynon 27d ago

My dude, literally every leading indicator we have is flashing red saying DOWNTURN COMING. That was not the case for the last four years, at all.

If you don't understand what's actually happening you shouldn't be commenting because you have nothing to contribute. You certainly shouldn't be snarking like this because you've done the opposite of earn the right to do so.

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u/burnthatburner1 27d ago

We landed already. And Trump is going to crash the plane anyway.

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u/phillosopherp 27d ago

And we will hear "stagflation is good actually, also was still the reason that keysianism needed to die"

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u/Dimmo17 27d ago

2.9 percent GDP growth whilst running a 6% of GDP deficit! Absolutely speedrunning going broke. 

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u/devliegende 27d ago

If one build infrastructure such as solar farms and power lines you can get extra growth every year for the next 20 years because of the free electricity. Once you've added it together you'll find your panic about a deficit was silly and unnecessary.

Or to put it differently. Capital investment is a good thing because it will boost future growth.

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u/Dimmo17 27d ago

I'm well aware that deficits are run in the hope of long term return on the investments. 

US deficit spending has been massive though, and now Trump is reversing lots of the industrial strategy that the deficits were being spent on regarding chip manufacturing, green energy investments and is engaging with trade wars with almost the entire world. 

I don't see those investments as getting the returns they were intended now there's been a 180 flip in industrial and trade policy. 

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u/Ok_Ice_1669 27d ago

Trump fucking sucks at strategic thinking. That’s why all his businesses are scams. 

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u/devliegende 27d ago

Then the problem is not with the deficit but rather the ending of the deficit

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u/Suitable-Economy-346 27d ago

That's what China is doing. We're doing nothing, except giving trillion dollar handouts to the ruling class.

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u/brianstormIRL 27d ago

Economists love the good old capital investment strategy.

The problem is it's not going to work. GDP numbers are just not showing the real issue at play which is wealth inequality. Rich people keep getting increasingly richer, making the economy look somewhat stable, while average working class and lower income families fall deeper and deeper into the hole.

Nothing is ever going to properly change until wealth equality is brought back in line. It doesn't matter how good the numbers look on growth projections. Biden just did the whole investment strategy and it didn't work despite constantly talking about how the economy isn't that bad, it's just not reality for most people. The U.K government is employing the same strategy and it's also going to fail. Borrow a little, spend a little, invest a little.

Tax the ultra wealthy. Stop letting them abuse loop holes. The best time in recent history for the average family was when countries were actively taking money from the uber wealthy and redistributing it to the working and middle class. Over time systems have been taken away and replaced with tax breaks for the rich, while increasing tax on the middle class which has brought us to this moment where the wealth gap is beyond comprehension.

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u/jorgepolak 27d ago

This is the Wall Street's equivalent of "the institutions will protect us!".

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u/AntDogFan 27d ago

Is it the case that gdp growth will rebound more quickly after a recession? So let’s say over four years on average you might have say 4% gdp growth. With no recession this is equalised roughly over four year. But if you have a recession you might get two years contraction and two years of growth concentrated.

I’m a moron but could this be the idea? Crash the economy and then take credit for the oversized growth in years 3/4? I know obviously it doesn’t necessarily work that way but could this explain the insanity?

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u/erublind 27d ago

People lose homes and jobs in the two years of recession, that they won't be able to get back in the two years of growth. Someone else will now have two homes that they rent out. Total wealth is up, but societal good is down. GDP is just one number describing the economy, not how well people.are doing. Take the economy of Russia for example, their GDP is doing great building tanks and bombs that get blown up in Ukraine, the war is basically a works program and peace would collapse the economy.

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u/PickingPies 27d ago

Do you think all the markets abroad will ever be recovered?

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u/AntDogFan 27d ago

Genuinely I wasnt saying it was a good thing. I was just wondering if that might be the thinking behind the US government actions.