Frank Nez 
On August 6, 2025, a weak U.S. jobs report and slowing economic growth triggered fresh warnings from analysts that the nation may be sliding toward a recession, with President Donald Trump’s sweeping tariffs identified as a primary catalyst.
According to an ABC News report, the economy grew at an annualized rate of just 1.2% in the first half of 2025, down from 2.8% the previous year, while July’s job growth of 73,000 fell far short of expectations.
Economists are divided on the severity of the threat, with some citing Trump’s trade policies as a drag on growth, while others argue it’s too early to predict a downturn.
As consumer spending weakens and inflation persists, the debate intensifies over whether the U.S. can avoid a recession amid rising economic uncertainty.
Here’s the latest.
Economic Indicators Raise Red Flags
The Bureau of Economic Analysis reported a 1.2% annualized GDP growth rate for the first half of 2025, a sharp decline from 2024’s 2.8%.
July’s jobs report showed a mere 73,000 jobs added, well below the anticipated 100,000, with revisions slashing May and June gains by 258,000, according to The Economic Times.
The unemployment rate climbed to 4.3%, the highest since October 2021, triggering the Sahm Rule—a recession indicator signaling a downturn when the unemployment rate rises 0.5 percentage points within a year, per ABC News.
Moody’s Analytics chief economist Mark Zandi told ABC News, “The risks are increasingly high that we’re going into recession,” estimating a 35% probability and attributing the slowdown to Trump’s tariffs.
Mark Zandi issued a stark warning that nearly one-third of the U.S. economy is either in recession or at high risk of slipping into one.
Zandi noted, “The economy is on the precipice of recession,” as earlier reported by FrankNez Media.
Trump’s policies, including a 10% across-the-board tariff and up to 50% levies on goods from China, India, and the EU, have raised costs for importers, risking higher consumer prices and reduced business investment, per Fortune.
Goldman Sachs raised its recession odds from 15% to 25%, while JPMorgan adjusted its forecast from 60% to 40% after Trump scaled back some tariffs.
Tariffs Fuel Economic Uncertainty
Trump’s tariffs, part of his “America First” agenda, have roiled markets and drawn retaliatory measures from Canada, China, and others.
Olu Sonola of Fitch Ratings warned that tariffs could add at least one percentage point to inflation by 2026, with consumer spending—accounting for 70% of U.S. economic activity—already faltering.
Zandi noted, “Tariffs weigh on economic growth,” highlighting their role in squeezing corporate profits and consumer wallets.
The Yale Budget Lab also reported that Trump’s August 7 tariffs raised the average effective tariff rate to 18.3%, the highest since 1934.
Despite these concerns, some economists remain skeptical.
For example, Mark Blyth, a professor at Brown University, told ABC News, “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,” cautioning against overreaction.
Harry Holzer of Georgetown University added, “It’s too early to see whether this is a trend,” noting the absence of widespread job losses typical of recessions.
Claudia Sahm, a former Fed official, emphasized that recessions are “unforecastable,” citing past false alarms.
Public and Market Reactions
On X, users like @BizToc amplified Zandi’s warning, noting that one-third of the U.S. economy is at risk.
Markets have shown resilience, with the Nasdaq up 0.4% since late July, though the Dow Jones fell 1.4%.
Trump defended his tariffs on Fox News, acknowledging a possible “period of transition” but insisting they will boost U.S. manufacturing.
However, critics, including Sen. Alex Padilla, have linked Trump’s policies to broader economic distress.
Meanwhile, supporters like @WarClandestine argue they prioritize American jobs.
A Pew Research Center poll showed 62% disapproval of Trump’s economic handling, with 54% opposing his immigration crackdowns.
The National Bureau of Economic Research (NBER) defines a recession as a “significant decline in economic activity” lasting months, beyond just two quarters of negative GDP growth.
While the U.S. is not currently in a recession, the combination of sluggish hiring, high tariffs, and a 2.8% core inflation rate poses risks of stagflation—slow growth with rising prices—further complicating Federal Reserve policy.
Federal Reserve Chair Jerome Powell signaled a potential rate cut in September, but uncertainty persists.
As the 2026 midterms near, the outcome of Trump’s tariff-driven agenda and the Fed’s response will shape the economic and political landscape.
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