(The Economic Collapse Blog)—Is the U.S. economy headed for a recession? Nobody can deny that consumer confidence is plummeting, home sales are way down, mass layoffs are being conducted all over the nation, thousands of stores are closing, and a global trade war has erupted.
Meanwhile, the Atlanta Fed’s GDPNow model is currently projecting that the U.S. economy will shrink at an annualized rate of 1.8 percent during the first quarter of 2025. Needless to say, none of these are good signs.
In recent weeks, the corporate media has been running lots of stories about how the odds of a recession are suddenly surging. Here is one example from NBC News…
Trade tensions have torn into the markets. With stocks sliding into correction territory in the last week, a question emerges: Is a recession next?
Traders on prediction markets — where people wager on such events as the likelihood of a recession — are increasingly betting on an economic downturn. Polymarket, for example, currently places the odds on a recession in 2025 at 40% — a sharp jump of nearly 20 percentage points in under a month.
That is quite alarming.
And earlier today, it was being reported that a Deutsche Bank survey of 400 experts found that nearly half of them now believe that “the U.S. is heading for a recession”…
Chances that the U.S. is heading for a recession are close to 50-50, according to a Deutsche Bank survey that raises more questions about the direction of the U.S. economy.
The probability of a downturn in growth over the next 12 months is about 43%, as set by the average view of 400 respondents during the period of March 17-20.
I haven’t seen this much chatter about a potential recession in a long time, and a lot of people out there are really scared.
In an attempt to help some of those frightened people, USA Today just posted an article with advice about how to prepare for a recession…
If the United States is about to enter a recession, as some economists fear, it will be one of the most widely anticipated downturns in recent memory.
Americans have had lots of time to prepare. But are we ready?
Personally, I like to look at the cold, hard numbers to determine whether a recession is coming or not.
And what the cold, hard numbers are telling us right now is extremely alarming.
Normally tax revenue declines significantly when an economic downturn is upon us, and according to the Washington Post it appears that federal tax revenue in 2025 will be down by about 10 percent compared to last year…
Senior tax officials are bracing for a sharp drop in revenue collected this spring, as an increasing number of individuals and businesses spurn filing their taxes or attempt to skip paying balances owed to the Internal Revenue Service, according to three people with knowledge of tax projections.
Treasury Department and IRS officials are predicting a decrease of more than 10 percent in tax receipts by the April 15 deadline compared with 2024, said the people, who spoke on the condition of anonymity to share nonpublic data. That would amount to more than $500 billion in lost federal revenue; the IRS collected $5.1 trillion last year. For context, the U.S. government spent $825 billion on the Defense Department in fiscal 2024.
“The idea of doing that in one year, it’s hard to grapple with how meaningful of a shift that represents,” said Natasha Sarin, president of the Yale Budget Lab and a senior Biden administration tax official.
In a season that is full of red flags for the economy, this may be the biggest red flag of them all.
Another really bad sign is that consumer sentiment just plunged to a 29 month low…
Consumer sentiment in the U.S. fell for the third consecutive month in March, now down 22% from December 2024 before President Donald Trump took office, a new survey found.
The University of Michigan survey showed consumer sentiment fell to 57.9 this month, a 29-month low. The index showed participants’ expectations for the future of their personal finances and the stock market had deteriorated. It also showed that Americans are expecting inflation to get worse, not better, during a time when many are worried tariffs will raise prices at the checkout aisle.
Economic conditions have not been good for a long time.
So it is quite disturbing to see that so many Americans expect things to get even worse.
One recent survey found that the percentage of Americans that believe that the economy is getting worse is more than twice as high as the percentage of Americans that believe that the economy is getting better…
Nearly half of Americans on Thursday said the economy is worsening, according to a new The Economist/YouGov poll.
Forty-eight percent of respondents said they believe the economy is worsening while 19 percent said it is improving.
The poll took place between March 9 and 11, a period that included rough days for the stock market.
And apparently Warren Buffett is also deeply concerned about where things are heading, because he has been in talks to sell off the fourth largest real estate brokerage in the entire country…
Warren Buffett is likely selling his real estate empire – the latest warning sign that the property market is in dire straits.
The real estate market has been on the skids in recent years. Brokerage companies have attempted to consolidate as home sales remain very low.
Compass, the largest real estate brokerage in the country, is in advanced talks to acquire Berkshire Hathaway’s HomeServices of America, the fourth-biggest player in the industry, according to The Wall Street Journal.
The housing market has been in a depressed state for quite a while, and that is not likely to change until interest rates go much lower.
Needless to say, the turmoil in the housing market has been hitting financial institutions quite hard.
Last week, we learned that Morgan Stanley is planning to lay off approximately 2,000 workers…
Wall Street heavyweight Morgan Stanley (MS) is planning to lay off about 2,000 employees later this month, a person familiar with the matter told Reuters on Tuesday.
The reduction of 2% to 3% of the company’s workforce, excluding financial advisers, was aimed at improving operational efficiency, the person said, requesting anonymity.
So many employers are shedding employees right now.
This is particularly true in the Washington D.C. area because of all the cutbacks that are happening.
Meanwhile, stores are permanently closing at a staggering pace. Just check out what Dollar General has decided to do…
Another national retailer will be closing stores in 2025.
Dollar General announced in its fourth quarter earnings report last week it is planning to close 96 Dollar General stores and 45 Popshelf stores during the first quarter of 2025, while another six Popshelf stores will be converted into Dollar General stores.
“As we look to build on the substantial progress we made on our Back to Basics work in fiscal 2024, we believe this review was appropriate to further strengthen the foundation of our business,” said Todd Vasos, Dollar General’s chief executive officer, in the earnings report.
Overall, it is being projected that somewhere around 15,000 stores will close in the United States in 2025.
If that projection turns out to be accurate, that will be a brand new all-time record.
All around us we can see very clear signs that a new economic downturn has arrived, and at this point the Atlanta Fed’s GDPNow model is forecasting that U.S. GDP will shrink at a 1.8 percent annualized rate during the first quarter…
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -1.8 percent on March 18, up from -2.1 percent on March 17. After this morning’s releases from the US Census Bureau, the US Bureau of Labor Statistics, and the Federal Reserve Board of Governors, the nowcast for first-quarter real gross private domestic investment growth increased from 7.2 percent to 9.1 percent. Due to FOMC blackout policy, today’s post does not include an update of the version of the model described here that adjusts the standard GDPNow model forecast for foreign trade in gold. That adjusted model will again be updated after our first scheduled post-blackout update on March 26.
If U.S. GDP contracts during the first quarter, all it will take is one more quarter of negative growth for us to officially be in a recession.
Our economic momentum is clearly taking us in the wrong direction very rapidly, and all of the societal chaos that we are witnessing at the moment is certainly not going to help matters.
This is not what a lot of people were expecting, but the truth is that it appears that a lot of economic pain is ahead.
Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
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