The odds of the U.S. economy slipping into a recession have grown in recent months, according to global financial services company UBS.
In an analysis cited by Fortune, the global financial services company said that recent “hard data” on the economy pointed to a 93 percent probability of an economic downturn, a risk level UBS described as “historically worrying.”
UBS notes that it is not yet forecasting a recession at this time, but anticipates an extended phase of stagnant economic growth. Its own “credit metrics-based” recession probability, Fortune writes, has roughly doubled to 41 percent since January.
Why It Matters
Several economists have been sounding the alarm about the elevated risks of a recession in 2025, due both to contemporary economic strains caused by the administration’s trade policies and long-term issues such as America’s ballooning national debt.
Warning signals have recently surfaced in the form of weak data on consumer confidence, as well as stagnant job growth and broader lab market difficulties.
What To Know
As Fortune reports, UBS’s forecast was based on its assessment of several objective economic indicators like personal income, consumption, industrial production, and employment.
Personal income and consumer spending have remained largely stable in 2025, according to Labor Department data, despite fears that the latter would be dampened if President Donald Trump‘s tariffs resulted in widespread price increases. However, the Federal Reserve’s most recent report found that industrial production had slipped by 0.1 percent in July.
Recent employment data, meanwhile, has undone previous optimism about the health of the labor market in the U.S. Beginning with the July jobs report from the Bureau of Labor Statistics (BLS), successive pieces of data have pointed to a significant drop in hiring momentum.
On Friday, the BLS reported that the economy added only 22,000 jobs in August, far below forecasts of a 75,000 increase. In addition, June and July’s numbers were revised down by a total of 21,000 jobs, which pushed the former into negative territory.
In a recent interview with Newsweek, Moody’s Chief Economist Mark Zandi said negative payroll figures could signal “the start of the recession.”
“I think the totality of evidence is increasingly pointing to a slowdown in the labor market that could reflect a recession,” Arindrajit Dube, professor of economics at the University of Massachusetts Amherst, told Newsweek earlier this week.
Soft data on consumer sentiment has been equally gloomy. The Conference Board’s Consumer Confidence Index dropped by 1.3 points to 97.4 in August. The Expectations Index—which gauges consumers’ short-term economic outlook—fell to 74.8, further below the 80-point threshold the research group says “typically signals a recession ahead.”
What People Are Saying
Moody’s Chief Economist Mark Zandi, in an interview with Newsweek last week, said: “I don’t think the economy is in a recession, at least not at this point, but it feels like it’s on the brink, it’s on the precipice of a recession.
“As soon as you see negative employment—payroll employment decline in a month—that’s when alarm bells should start going off,” he added.
Chief Economist for Comerica Bank Bill Adams, in comments shared with Newsweek following Friday’s jobs report, said: “The U.S. economy is operating in low gear in 2025, but is probably still growing—that is, not in recession. Economic growth will likely remain modest through year-end, then regain traction in 2026 as fiscal and monetary policy turn more accommodative.”
What Happens Next?
Upcoming pieces of data that could shape the economic outlook include Tuesday’s annual revisions to nonfarm payrolls figures, as well as inflation readings from the BLS on Thursday.
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