Is a Recession Coming in 2025? Key Economic Warning Signs Emerge

•

March 4, 2025 at 12:54 AM

Economic Indicators Suggest Potential 2025 Recession

Recent economic data shows concerning trends that could signal an upcoming recession:

GDP forecasts predict -2.8% contraction for Q1 2025, according to the Atlanta Federal Reserve (March 3 data). This would mark the first GDP decline since Q1-Q2 2022.

Consumer confidence is weakening, with the Conference Board's Expectations Index falling to 72.9 in February 2025 – dropping below the recession threshold of 80 for the first time in eight months.

Consumer spending decreased 0.2% between December and January, the first monthly decline in nearly two years according to Bureau of Economic Analysis data.

Current Economic Status

The U.S. economy remains technically strong and is not currently in recession. Even after challenges like the 2023 bank failures, the economy has shown resilience. Q1 2024 showed 1.3% annual growth according to the Bureau of Economic Analysis.

Federal Reserve interest rates icon

Federal Reserve Actions

Key Fed rate changes:

2022: Seven rate increases (0.25%-0.50% to 4.25%-4.50%)
2023: Four increases, ending at 5.25%-5.50%
2024: Rate cuts began in September
2025: Current range 4.25%-4.50%

Impact on Key Economic Factors

Housing Market:

Recession typically leads to lower home prices due to decreased demand
Historical responses vary (1990: slight decline, 2001: increase, 2008: significant drop, 2020: increase)
Mortgage rates usually decrease during recessions

Consumer Prices:

Food prices typically decline during recessions
Current prices remain elevated post-pandemic
Individual items affected by specific factors (e.g., avian flu affecting egg prices)

Treasury Bonds: