Is a US recession coming? 5 key questions answered

(*5*)Conference Board’s Leading Economic Index (LEI) has declined a minimum of 15 of the previous 18 months; board says a “significant growth slowdown” is baked in, although a full recession remains to be not its base case

(*5*)Weakness throughout manufacturing new orders, client expectations, and constructing permits

(*5*)Reuters economists’ ballot of April 7 places median likelihood of recession in subsequent 12 months at 45% – highest since Dec 2023

(*5*)Tariffs already shaving 0.8 proportion level off 2025 GDP forecasts; enterprise sentiment and capex plans falling

(*5*)Moody’s Analytics’ Mark Zandi in a March 2025 podcast put recession odds at 40% by end-2025(*5*)Bloomberg Opinion’s John Authers says odds of a 2008-style coverage mistake are rising; warns “it’s best not to wait for NBER confirmation”

(*5*)15-month slide within the Conference Board Leading Economic Index, tariff shock to provide chains, and a deeply inverted 2-10 yr Treasury curve

(*5*)Ray Dalio, founder Bridgewater Associates, has mentioned the US is “very close to a recession,” including that tariffs are “like throwing rocks into the production system” and will result in “something worse than a recession” if mishandled

(*5*)Tariff shock is crippling supply-chain effectivity; combines with ballooning US debt, a “breakdown of the monetary order,” and intensifying geopolitical battle — situations, Dalio says, mirror the Nineteen Thirties

Agency	Key Reasons
Tariffs, fading fiscal impulse, and tight credit score requirements

Recession	Peak	Trough	Duration (months)	Real GDP peak-to-trough	Peak Unemployment
Dot-com / Sept. 11	Mar 2001	Nov 2001	8	–0.3%	5.7%
Great Recession	Dec 2007	Jun 2009	18	–4.0%	10.0%
Covid-19 Recession	Feb 2020	Apr 2020	2 (shortest on report)	–19.2% (q/q annualized Q2)	14.7%

• 2001 US recession didn’t trigger a international one. World GDP grew 2.5%, however commerce development collapsed.
• 2007–09 was a US & international recession — first post-war international contraction (~1.3% world GDP ’09)
• 2020 Covid lockdown pushed world GDP down by ~3%, deepest since 1945

• Q1 2020 (–6.8% y/y) – first contraction since 1976
  Notes: Annual development nonetheless +2.2% for 2020; 2022 development simply 3% (worst exterior 2020)

• FY 2020-21 (–7.3%, with –24% in April–June 2020); RBI categorised H1 FY21 as a “technical recession”

• 1991 balance-of-payments disaster (actual GDP +1%)
• 2008-09 slowdown (development fell to three.1%, however stayed constructive)

(*5*)Supply-side shocks (oil, monsoon), exterior capital flows, informal-sector demand

(*5*)Job losses push staff again into agriculture/informality, miserable under-employment greater than jobless charge

(*5*)A US recession tightens international monetary situations through greenback funding & danger aversion

(*5*)An Indian recession primarily drags on regional commerce, remittances, and commodity demand; monetary contagion restricted by capital controls

Dimension	United States	India
General nature of major shock	Financial cycle & client credit score (housing, bank cards); stock cycle
Stabilising elements	Large: Unemployment insurance coverage, progressive taxes mitigate hit	Small; Informal employment > 45% limits social-security attain
Monetary-policy pass-through	Fast: Deep bond market, mortgage refinance	Slower; Bank-led system, excessive share of small corporations exterior formal credit score
Job & Wages	Unemployment rises sharply however advantages cushion earnings
Global spillover