Are We in a Recession?

Though the economy occasionally sputtered in the wake of the pandemic, it has certainly been resilient — and now, in 2025, the U.S. is not currently in a recession, according to a traditional definition.

In fact, the current state of the U.S. economy is still quite stable, according to most measures.

The definition of a recession

In the simplest terms, a recession happens when growth stops and the economy begins to shrink. The conventional benchmark has been that two consecutive quarters of a generally slowing economy defines a recession.

How long do recessions last?

Historically, recessions have lasted anywhere from months to several years, according to the National Bureau of Economic Research. Some recessions are mild and may end quickly, while others have lingering effects even after they’ve technically ended.

The shortest-ever recession was during the covid lockdown in spring 2020 only lasted two months. The longest U.S. recession ever was after the Civil War — it lasted more than five years. The Great Depression was the second longest, lasting from 1929 to 1938.

Since 1948, the so-called start of the modern era, there have been 12 recessions. The most defining recession of the 21st century was the Great Recession, which began in 2007 and ended in 2009.

Will there be a recession in 2025?

President Donald Trump’s recent tariff actions are escalating a global trade war that officials say is largely responsible for recent recession projections. Here’s what some prominent economists have said about a potential recession in 2025.

Federal Reserve Federal Open Market Committee (FOMC)

FOMC members are increasingly concerned about the high risk of a recession sometime in the next six months, according to minutes from the FOMC’s May 6-7 meeting released on May 28.

At an event on April 4, Federal Reserve Chair Jerome Powell said that while recession risks are increasing, there’s no clarity yet. “I realize that the uncertainty is high, and what we've learned is that the tariffs are higher than anticipated, higher than almost all forecasters predicted. We still don't know where that comes to rest though, and we're just going to have to see that through,” he said.”

Major financial institutions

• On April 4, JPMorgan Chase placed its expectations of a recession in 2025 at 60%. By May 6, the bank placed expectations under 50%, after Trump lowered China’s tariff rate. On May 14, Michael Feroli, JPMorgan’s chief U.S. economist, wrote in a note to investors, “The administration’s recent dialing down of some of the more draconian tariffs placed on China should reduce the risk that the U.S. economy slips into recession this year.” Then on May 27, JPMorgan lowered its risk projection to 40%. • On April 7, Goldman Sachs raised its odds of a U.S. recession from 35% to 45% — a 10 percentage point increase in the span of one week. Two days later, once Trump paused certain reciprocal tariffs, Goldman withdrew its recession prediction. • On April 11, BlackRock CEO Larry Fink told CNBC, “I think we’re very close, if not in, a recession now.” • On April 19, Torsten Slok, chief economist at Apollo Global Management, said there was a 90% probability of a recession in 2025 unless Trump pulls back his tariffs.

Larry Summers, former Treasury Secretary

On March 10, former Treasury Secretary Larry Summers posted on X that there was close to a 50-50 chance of a recession in 2025. He wrote, “I would have said a couple months ago a recession was really unlikely this year. Now, it’s probably not 50/50 but getting close to 50/50. There is one central reason. Economic policies that are completely counterproductive.”

Mark Zandi, Moody’s Analytics chief economist

Moody’s Analytics Chief Economist Mark Zandi says he thinks the risk of a recession in 2025 has doubled from earlier this year. On March 30, Zandi posted on the social platform X “I’m raising my odds that a recession will begin sometime this year to 40%, up from 15% at the start of the year.” He says he believes “things are sure to get worse.”

Zandi pointed to a number of reasons for his updated projection including:<br>Concerning economic data: Declining consumer confidence, elevated inflation and slowing consumer spending.<br>Trump’s tariff actions, which have sparked a trade war.<br>The mass federal job cuts made by the so-called Department of Government Efficiency, or DOGE.

Zandi said that recession is less likely than not because layoffs are low, while both jobs and income continue to grow. However, he added this caveat, “…as long as the tariffs and DOGE cuts continue to mount, so too will the odds of recession.”

How the Fed is trying to steady the economy

The Federal Reserve plays a big role in trying to stabilize the economy, in part by adjusting the interest rates paid by both businesses and consumers. The Fed may increase the federal funds rate to try to cool inflation and lower rates to make borrowing cheaper and stimulate the economy. It's a tricky balance, and the Fed has made some significant moves in the last few years:

2022: In an attempt to combat rising inflation, the Fed rate increased seven times — from a range of 0.25% - 0.50% in March to 4.25% - 4.50% in December.

2023: The Fed increased rates four times and left them unchanged four times, ending the year at a 5.25% - 5.50% target range.

2024: The Fed continued to pause the hikes throughout the year before making cuts in September, November and December in response to cooling inflation.

2025: The Fed paused rates at its January, March and May meetings. The current target range is 4.25% - 4.50%.

Getting ready for a recession

Right now, the nation has not tipped into recession — and certainly not a depression, either. A depression is an extended economic breakdown, and we have not seen signs of that kind of pain. (See recession vs. depression.)

» MORE: How is the economy doing?

But economic declines begin before a recession is declared official. In other words, we may feel a recession before we know we’re in one. Economic cycles are impossible to predict, so it's best to be financially prepared.