Why the next US recession may be pushed back to 2025, according to JPMorgan (2024)

FAQs

Why the next US recession may be pushed back to 2025, according to JPMorgan? ›

The economic data should “give more confidence that the US economy is recovering in additional sectors and recession fears for 2024 are likely to be pushed into 2025”, it noted. This means that if there was a potential recession it is pushed back to 2025 because of the solid manufacturing data.

Fears of an economic recession may have to be pushed back to 2025, according to JPMorgan. US factory activity expanded in March for the first time since September 2022. JPMorgan said the rebound in manufacturing activity bodes well for continued economic resilience.

While we do not forecast a recession in 2024, we do expect consumer spending growth to cool and for overall GDP growth to slow to under 1% over Q2 and Q3 2024. Thereafter, inflation and interest rates should gradually normalize and quarterly annualized GDP growth should converge toward its potential of near 2% in 2025.

Though the economy occasionally sputtered in 2022, it has certainly been resilient — and now, in the second quarter of 2024, the U.S. is still not currently in a recession, according to a traditional definition.

A recession is a meaningful and extensive downturn in economic activity. A common definition holds that two consecutive quarters of decline in gross domestic product (GDP) constitute a recession. In general, recessions bring decreased economic output, lower consumer demand, and higher unemployment.

The US economy entered 2024 on strong footing, but headwinds including rising consumer debt and elevated interest rates will weigh on economic growth. While we do not forecast a recession in 2024, we do expect consumer spending growth to cool and for overall GDP growth to slow to under 1% over Q2 and Q3 2024.

In particular, a recession is usually associated with a decline of 2 percent in GDP. In the case of severe recessions, the typical output cost is close to 5 percent. The fall in consumption is often small, but both industrial production and investment register much larger declines than that in GDP.

The 2024–25 Outlook

We expect growth to rebound to a 2.0 percent pace by 2025Q1 and stay in that range through yearend. On a Q4-to-Q4 basis, real GDP grows by 1.8 percent during 2024 and 2.2 percent during 2025.

The global economy is continuing growing at a modest pace, according to the OECD's latest Economic Outlook. The Economic Outlook projects steady global GDP growth of 3.1% in 2024, the same as the 3.1% in 2023, followed by a slight pick-up to 3.2% in 2025.

ITR Economics is forecasting that a macroeconomic recession will begin in late 2023 and persist throughout 2024. Business leaders recently had to lead their companies through the recession during the COVID-19 pandemic, and some were even in leadership positions back in 2008, during the Great Recession.

Are we in a Great Depression in 2024? ›

Not this year nor the year after. The Federal Reserve's policymaking committee of 19 officials released a new set of economic projections last week, showing that they now expect economic growth in 2024, 2025 and 2026 to be even stronger than they previously thought.

Economists predict another year of slow growth around the world in 2024. While the risk of a global recession is lower in the year ahead, two G7 economies dipped into recession at the end of 2023.

As long as you're secure with your finances a downturn can be a great opportunity to buy a home. During a recession, there are usually fewer buyers, so houses stay on the market longer.

While the prices of individual items may behave unpredictably due to unexpected economic factors, it is true that a recession might cause the prices of some items to fall. Because a recession means people usually have less disposable income, the demand for many items decreases, causing them to get cheaper.

A recession can create opportunities for certain types of businesses, primarily those that offer essential products or services that people cannot do without. These businesses tend to perform well during economic downturns because they cater to basic human needs.

Don't: Take On High-Interest Debt

It's best to avoid racking up high-interest debt during a recession. In fact, the smart move is to slash high-interest debt so you've got more cash on hand. Chances are your highest-interest debt is credit card debt.

US Recession Probability (I:USRPEM)

US Recession Probability is at 58.31%, compared to 58.31% last month and 57.77% last year. This is higher than the long term average of 14.71%.

WASHINGTON, DC – Economic growth remains likely to decelerate and ultimately result in a mild recession in 2024, followed by a return to growth in 2025, according to the November 2023 commentary from the Fannie Mae (FNMA/OTCQB) Economic and Strategic Research (ESR) Group.

Lasting from December 2007 to June 2009, this economic downturn was the longest since World War II. The Great Recession began in December 2007 and ended in June 2009, which makes it the longest recession since World War II. Beyond its duration, the Great Recession was notably severe in several respects.