Economists Warn of Recession

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The announcement of sweeping tariffs of at least 10% on U.S. imports rocked markets Thursday and had economists warning of dire times for the economy.

By Tim Smart
April 3, 2025

Wall Street is poised for a sharp drop Thursday morning after global stock markets slumped overnight following President Donald Trump’s sweeping announcement of tariffs of at least 10% on imports and considerably more – a move that threatens to spread economic turmoil around the world ...

https://www.usnews.com/news/economy/articles/2025-04-03/markets-crash-economists-warn-of-recession-as-trump-announces-sweeping-import-tariffs-on-many-countries

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1. stock market selloff may trigger US recession

by Vivekanand Jayakumar, opinion contributor - 04/03/25 3:00 PM ET

The indefatigable American consumer has managed to regularly surprise economic doomsayers in recent years. Real personal consumption expenditure has remained strong and steady during much of the post-pandemic expansionary cycle. Early in the recovery, consumption was buoyed by excess savings associated with large-scale fiscal transfers and by strong wage gains linked to an unusually tight labor market.

More recently, however, low- and middle-income households have struggled in the face of sticky inflation and high borrowing costs. They have depleted their excess savings and a cooling labor market is starting to affect wage growth. Delinquency rates (especially for credit card and auto loans) among subprime borrowers are on the rise.

Consequently, personal consumption expenditure, which accounts for around 67 percent of GDP, is increasingly driven by the spending patterns of high-income households. Those earning more than $250,000 a year (the top 10 percent of earners) are now responsible for nearly 50 percent (compared to the one-third share observed in the 1990s) of all U.S. consumer spending. So, what has led to the amplified reliance on spending by the rich of late, and what risk does this pose for the American economy?

Before addressing recent developments, it is worth noting that, in economics, income and wealth are related but distinct concepts. Income, which represents the salary or earnings per period, is a flow variable (something measured over a specified period of time). Wealth, which refers to net worth (total assets minus total liabilities), is a stock variable (something measured at a specific point in time) ...

https://thehill.com/opinion/5229397-wealth-inequality-consumption/

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2. JPMorgan Raises Recession Risk to 60%

A global recession is more likely to happen than not this year, thanks to Wednesday's tariff broadside from the U.S.

That's the opinion of JPMorgan analysts who raised their forecast to 60% Thursday. That's up from 40% before President Trump's Wednesday afternoon announcements sent markets tumbling.

The administration's plans will likely amount to a 20 percentage point increase in U.S. tariff rates, the firm said. The last increase that large, in 1968, was followed by recession, economists led by Bruce Kasman said.

Analysts said retaliatory tariffs by other countries, weakening business sentiment in the U.S. and supply chain disruptions will make things worse. Jeep maker Stellantis has already halted production at its auto assembly factories in Mexico and Canada ...

https://www.wsj.com/livecoverage/trump-tariffs-trade-war-stock-market-04-03-2025/card/jpmorgan-raises-recession-risk-to-60--clWSymXLSyvXZ7fPu6g6