US Vice President J.D. Vice President of the United States J.D. V. V. V. V. V. V. V. V. V. V. V. V. Donald Trump and Elon Musk (R.) walk away from the oval office in the opposite direction before leaving the White House on March 14, 2025.
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UCLA Anderson’s forecast issued its first “recession clock” on Tuesday, citing significant economic changes from Trump administration policies.
UCLA Anderson, who has been publishing forecasts since 1952, said the administration’s tariffs and immigration policies and plans to cut the federal workforce could potentially contract the economy.
The analysis was entitled “Trump’s policy promises a recession if fully enacted.”
“There are no signs of a recession yet, but there is a full possibility that it will form soon,” a news release from the forecaster said.
The US recession is only officially declared by the National Bureau of Economic Research’s Business Cycle Dating Committee. The committee employs a variety of indicators, including determining whether the economy is contracted, such as production, employment, income, growth. At this point, there are no specific indicators to be close to the level that encourages the committee to declare a recession.
The average respondents to the March CNBC Fed survey published Tuesday predicted the probability of a recession of 36% next year, up from 23% in the previous month. However, it remains well below the 50% level that we won in 2022 and 2023 in the wake of the pandemic, and remains incorrect. It shows how difficult it is to predict a recession or determine if there is one economy. Also, the Fed’s investigation shows that the recession is not the basic case of most Wall Street forecasters, but only has some growing concern.
A recession occurs when multiple sectors of the economy contract at the same time. UCLA Anderson’s forecast shows that cutting labor from the administration’s immigration policy could lead to labor shortages, tariffs could raise prices and lead to contraction in the manufacturing sector, and changes in federal spending could reduce employment for government workers and private contractors.
“If these and the resulting feedback to demand for goods and services occur simultaneously, they will create a recession recipe,” the predictor’s statement said.
“Stagflation”
Administrators from the president to the EU, among his highest economy, have not particularly rebutted the possibility of a recession from their policies. President Donald Trump said there was a “transition period,” but the Commerce Secretary said the recession was “worthy” because of the benefits that ultimately come from policy.
Recessions are often the result of unexpected shocks to the economy. The surge in optimism after Trump’s election, and the recent sharp decline in some studies, suggests that both businesses and consumers are not ready for even the scope and nature of some of the policies currently being pursued.
In timing, UCLA Anderson’s predictions simply say that economic downturns could occur in the next year or two. The report states, “weaknesses are beginning to emerge in household spending patterns, and the financial sector is ready to amplify the recession in the areas of asset valuation and newly introduced risks.
