Is the US headed toward a recession? Experts weigh in

A weak jobs report in recent days raised alarm among some analysts that the U.S. economy may be slipping toward a recession.

Hiring slowed sharply over the summer, federal government data showed. The jobs report came days after fresh gross domestic product data indicated average annualized growth of 1.2% over the first half of 2025, well below 2.8% growth last year.

Analysts who spoke to ABC News said the economy could dip into a downturn but the outlook remains uncertain. They differed sharply on the likelihood of a recession, ranging from dire warnings to skepticism about whether the recent data suggests significant cause for concern.

“It’s too early to see whether this is a trend,” Harry Holzer, a professor of economics at Georgetown University and a fellow at the Brookings Institution, told ABC News. “The likelihood of a recession went up because of these job numbers, but it could be a one-time adjustment or a bump down that avoids negative growth.”

The economy added an average of about 35,000 jobs over three months ending in July, which marks a major slowdown from roughly 128,000 jobs added monthly over the prior three months, U.S. Bureau of Labor Statistics data on Friday showed. Employers are hiring at their slowest pace since 2020.

Hours after the release of the report on Friday, President Donald Trump fired BLS Commissioner Erika McEntarfer, an appointee of former President Joe Biden who was confirmed by a bipartisan vote in the Senate in 2024.

In a social media post, Trump volleyed sharp criticism and baseless accusations at McEntarfer, claiming without evidence that the data had been “manipulated.” The jobs report featured revisions of previous months’ data, which is a routine practice.

McEntarfer did not immediately reply to ABC News’ request for comment.

“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy,” McEntarfer said in a social media post after her dismissal. “It is vital and important work and I thank them for their service to this nation.”

William Beach, a former commissioner of the Bureau of Labor Statistics, who was appointed by Trump, condemned the firing of McEntarfer.

“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau,” Beach posted on X.

Trump, meanwhile, touted his economic performance in a social media post: “The Economy is BOOMING under ‘TRUMP’ despite a Fed that also plays games, this time with Interest Rates.”

Some analysts disagreed. The hiring cooldown hit a wide swath of industries, including manufacturing and the federal government. The overall unemployment rate of 4.2% continued to hover near a historically low level, but unemployment rose among Black workers, which can foretell job losses among other groups.

“The risks are increasingly high that we’re going into recession,” Mark Zandi, chief economist at Moody’s Analytics, told ABC News. “We’re not there yet – and maybe this thing gets turned around. But that’s increasingly becoming hard to do with each passing week.”

Zandi largely faulted the rollout of Trump’s tariffs for the apparent cooldown. In recent months, Trump has imposed a slew of far-reaching levies on dozens of countries and some specific products, such as steel, aluminum and cars.

Tariffs place a tax burden on importers, raising their costs and risking elevated prices for consumers, Zandi said. “Tariffs weigh on economic growth,” Zandi added.

The Trump administration has touted tariffs as part of a wider set of “America First economic policies,” which have “sparked trillions of dollars in new investment in U.S. manufacturing, technology, and infrastructure,” according to the White House’s website.

The economy would likely need to slow further to be considered a recession.

Many observers define a recession through the shorthand metric of two consecutive quarters of decline in a nation’s inflation-adjusted gross domestic product.

The National Bureau of Economic Research, or NBER, a research organization seen as an authority on measuring economic performance, uses a more complicated definition that takes into account several indicators that must convey “a significant decline in economic activity spread across the economy, lasting more than a few months,” the group says.

While acknowledging the tepid numbers, other analysts said warnings about a recession are premature.

The economy has largely averted the type of widespread job losses that often accompany a recession. Consumer spending, which accounts for about two-thirds of economic activity, ticked higher over three months ending in June. Corporate earnings have remained robust.

The jobs report sent stocks tumbling but markets have since recovered.

“It seems to me people are anchoring on the jobs report and using it to telegraph a recession. I’m not sure it does that,” Mark Blyth, a professor of political economy at Brown University, told ABC News.

“Nobody knows and everybody is doing wish fulfillment,” Blyth added. “If you don’t like the administration’s policies, you’re willing it to be a recession and if you like them, you’re saying, ‘no.'”

To be sure, recession forecasts are hardly bulletproof. A surge of inflation in 2021 — and an interest-rate hike soon afterward — unleashed a flood of recession warnings, but no downturn came to pass. More recently, Wall Street banks predicted a possible recession after Trump’s “Liberation Day” tariff announcement, before pulling back their assessments after Trump dialed back the levies.

“Recessions tend to be unforecastable,” Claudia Sahm, chief economist at New Century Advisors and a former Fed official, told ABC News. “Often there’s an event that causes people to lose confidence, change behavior and start a downward spiral. Those events are very hard to predict.”

Still, Sahm added, the available data indicates a weakened economy.

“A slow-growing economy is not a good economy,” Sahm said. “We want to avoid a recession but avoiding a recession is a low bar. We want an economy that’s better than that.”