There are renewed concerns about a recession after another difficult day on the stock market and the possibility of tariffs.
MINNEAPOLIS — It is a pivotal week for our economy.
On Wednesday, new Trump-imposed tariffs on imported goods are scheduled to go into effect, and two days later on Friday, lawmakers on Capitol Hill face a deadline to avert a potential government shutdown.
This all comes as economists warn of a potential recession looming, in part from massive cuts in government jobs and continued rising costs. Also, in recent days, President Trump said he is not ruling out a recession.
Whenever there is economic uncertainty, people love to throw around the “R” word, but are we headed for a recession According to several experts and data points, the answer is maybe.
University of Saint Thomas economics professor Tyler Schipper says there is some reason to be worried. The proposed tariffs and recent changes coming out of Washington are causing a lot of uncertainty and if there’s one thing companies and the stock market don’t like, it’s uncertainty.
“There is some recognition within the White House right now that some of the policies they’re doing, at least in the short run, could have negative effects on growth,” Schipper said.
Economists at Goldman Sachs are also slightly worried about a recession. They recently raised the likelihood of a recession in the next 12 months from 15% to 20%. Yardeni Research recently raised their recession odds as well, bumping the likelihood up from 20% to 35%
But what do consumers think?
According to the Consumer Sentiment Index from the University of Michigan, consumers are starting to get worried about the economy, but they were even more worried three years ago when inflation was near its peak, and we did not hit a recession then.
Federal Reserve Chairman Jerome Powell said last Friday, “Despite elevated levels of uncertainty, the U.S. economy continues to be in a good place.”
Treasury Secretary Scott Bessent told CNBC on Friday, “We’ve become addicted to this government spending, and there’s going to be a detox period.”
Professor Schipper agrees; economists are watching the situation closely, but it’s not time for consumers to panic.
“I think it’s too soon to be worried, but it’s one of those times where my ears start to perk up. Right now, it’s not a five-alarm fire.”