Direct answer: As of now, economists and official indicators show mixed signals about whether the U.S. is in a recession. Several reputable sources in late 2025 point to ongoing caution about growth, with some indicators suggesting a heightened risk of a recession over the coming months, while others note resilience in parts of the economy. The consensus among many analysts is that a formal recession is not officially declared yet, but the probability remains nontrivial and has fluctuated with monetary policy and evolving economic data.
Context and nuance
- Official definitions: A recession is typically defined retrospectively by two consecutive quarters of negative GDP growth or by a formal declaration from a national statistical body or equivalent authority. In practice, many analysts monitor GDP growth, unemployment, inflation, and consumer spending to gauge recession risk in real time.
- Key risk signals cited by observers:
- Inflation dynamics and monetary policy: Some central bankers warn that delaying rate cuts could prolong weakness, while others emphasize the need to guard against inflation, which can complicate the recession outlook.
* GDP and labor market: GDP growth has shown pockets of strength and weaknesses intermingled with a cooling labor market in some sectors, contributing to mixed readings on recession likelihood.
* Forward-looking probabilities: Market-based or analyst-based measures (e.g., recession probability estimates) have varied, with several trackers suggesting non-negligible but not definitive odds of a downturn within the next year.
- Sectoral differences: Some industries (e.g., housing, manufacturing) may slow ahead of others, while consumer spending and services can show resilience, leading to a nuanced picture rather than a broad, uniform contraction.
What to watch going forward
- GDP growth trajectory in upcoming quarters, especially any negative prints.
- Unemployment trends and wage growth, which strongly influence consumer spending.
- Inflation path and the stance of the Federal Reserve regarding rate cuts or policy shifts.
- Leading indicators such as consumer confidence, manufacturing surveys, and housing activity.
Notes on sources
- Latest reporting and projections from major financial outlets and research groups provide the clearest sense of current risk levels and what markets expect next. These sources emphasize that the situation is evolving and depend on incoming data and policy decisions.
