Recession fears persist amid inflation and trade wars
President Donald Trump did not rule out the possibility of a recession in a recent Fox News interview, amid his administration’s continuing trade war.
Recession panic is back if it ever really went away.
Social media is filled with claims that the U.S. has already entered one with some users even coining the term “recession core,” that reflects an aesthetic trend of minimalism and practicality. TikTok users are identifying “recession indicators” in pop culture and fashion, or things that were popular during the Great Recession, regaining popularity.
“If yall are bringing back recessions, I’m bringing back capris,” Courtney Zamora joked on TikTok.
It’s clear people are kidding around in many of the videos, but the number of posts online about an impending recession and stock market behavior show Americans are worried amid escalating trade wars.
But social media and stock prices don’t determine when the country enters a recession, and the word does have an actual definition worth knowing as Americans feel economic uncertainty.
Who decides when the U.S. is in a recession?
Eight economists who serve on the Business Cycle Dating Committee, within a nonprofit research organization not affiliated with the federal government known as the National Bureau of Economic Research (NBER), make the call.
They are appointed by the NBER president James Poterba, who has held the position since 2008, after consultation with committee chairs and the nonprofit’s board of directors.
The committee has maintained a chronology of U.S. business cycles since its creation in 1978. Without an alternate chronology compiled or published by the U.S. government, the committee became the go-to source for formally identifying recessions.
What is a recession?
The NBER defines a recession as a “significant decline in economic activity that is spread across the economy, lasting more than a few months.” Three criteria – depth, diffusion, and duration – need to be met individually to some degree in order to formally identify a recession, according to the NBER.
The committee considers several factors including real income, payroll employment, consumer spending, industrial production, and GDP when making its determinations.
“Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them,” NBER explains on its website.
How fast does the committee decide if there is a recession?
The most recent and shortest recession in modern history was during the COVID-19 pandemic, lasting from February to April 2020.
The NBER identified the recession in June of that year, months after it began. It took another year before the NBER announced in July 2021 that the recession had ended in April 2020.
NBER says its other recession determinations have taken between four and 21 months. There is no fixed timing rule. The committee waits until it’s confident to make a confirmation, according to NBER.
Are we heading into a recession?
Despite stock market tumbles, a slide in consumer confidence, and job cuts, experts say Americans are still in good financial shape, forecasters told USA TODAY.
But they are watching closely what President Donald Trump does next as inflation, tariffs, and escalating trade wars will impact where the U.S. economy is headed.
During a Sunday Fox News interview with Maria Bartiromo, the president didn’t rule out the possibility the country could face a recession in 2025 instead saying, “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,” Trump told Bartiromo. “It takes a little time, but I think it should be great for us.”
Reach Rachel Barber at [email protected] and follow her on X @rachelbarber_
