US Recession: Is World's Largest Economy Heading For ‘Trumpcession’? Know What Experts Have to Say

US Recession: Concerns over trade wars, sliding economic growth and sustained inflation have raised speculation about the risk of recession in the world's largest economy, the United States. President Donald Trump's stern stance on import duties and taxes has further sparked fresh fears of degradation of the US economy shortly.

Several experts believe that Trump's unpredictable approach is pushing the US economy towards 'Trumpcession'. Whereas, many have rejected the idea of a US recession and called it "incredibly absurd".

What is a recession? How to know it is one?

According to the National Bureau of Economic Research (NBER), the recession is a significant decline in economic activity spread across the economy lasting more than a few months.
The slowdown is visible in "production, employment, real income, and other indicators". "A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough," read an article on 'What is Recession' published by Stijn Claessens and M. Ayhan Kose on International Monetary Fund's website.

Is US heading towards recession?

According to the latest State Bank of India report on US economy, America's economic growth is sliding in the one last year. The country's
GDP growth rate and US stock market

GDP growth has declined from 3.2% in Q4 2023 to 2.5% in Q4 2024. About US stock markets, the S&P500 has given up all its gains since the November elections and the monthly return for Mar'25 month are going to be the lowest since COVID-19.

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According to The Guardian, analysts believe that the risks of US recession are growing in 'Trumpcession' amid a sharp decline in business and consumer spending.

Consumer spending

Consumer spending in America fell for the first time in the last two years in January 2025. Additionally, the goods trade deficit widened to a record high as businesses front-loaded imports to avoid tariffs, setting up the economy for weak growth or even a contraction this quarter, said SBI in its report.

Harvard Kennedy School economist Jeffrey Frankel told NBC News that low consumer spending as the earliest and as one of the most direct indicators of economic downturn.

"If enough people and enough companies put things off because of uncertainty, you can tip the economy into recession," Menzie Chinn, a University of Wisconsin professor told NBC News.

US Recession fears 'completely absurd', says expert

Decrease in US consumer spending is a necessary correction which is rather a positive development as the US economy was previously growting at an unsustainable rate higher than 2%, according to William Lee, Chief Economist and Executive Director of The Milken Institute.

In a conversation with CNBC TV-18, William Lee called the fears of US recession as 'incredibly absurd' adding that most of the forecasts may present a distorted picture because they are based on unreliable soft data like consumer confidence surveys.

Lee also dismissed the widespread predictions of a recession as "incredibly absurd," arguing that many forecasts rely heavily on unreliable "soft data" like consumer confidence surveys. He stated that these surveys are often influenced by factors like stock market fluctuations and job market conditions, which don't always accurately reflect actual consumer behaviour.

"There is without a slowdown in the US economy because it was growing at a very unsustainable pace, well above 2.5%, and coming down to close to 2% is where the natural rate of growth is," CNBC TV18 quoted Lee.

While many experts are giving their two cents on the possibility of a US recession, it would require more data for experts and researchers to identify the recession.