Fact Check: We are headed for a recession.

Fact Check: "We are headed for a recession."

What We Know

The claim that "we are headed for a recession" is supported by various economic indicators and forecasts. The Conference Board's Leading Economic Index (LEI) showed a significant decline of 1.0% in April 2025, following a 0.8% drop in March. This decline is notable as it represents the largest monthly decrease since March 2023, a period when recession fears were also prevalent. The LEI is designed to predict turning points in the business cycle, and its recent performance suggests a warning signal for economic growth. Over the past six months, the LEI has declined by 2.0%, indicating a consistent downturn.

Moreover, the Coincident Economic Index (CEI), which reflects current economic conditions, showed only a slight increase of 0.1% in April 2025. This modest growth, combined with the negative trends in the LEI, raises concerns about the overall economic trajectory. Additionally, a survey indicated that the odds of the U.S. entering a recession by March 2026 have risen to 36%, up from 26% in the previous quarter (Bankrate).

Analysis

While the indicators suggest a potential recession, it is crucial to evaluate the context and the reliability of the sources. The Conference Board is a reputable non-profit organization that provides economic insights based on comprehensive data analysis. Their LEI and CEI are widely used by economists to assess economic conditions. However, it is important to note that while the LEI has shown a downturn, it has not yet reached the threshold that typically signals an imminent recession, as indicated by the lack of a recession signal despite the negative growth rate.

On the other hand, the Deloitte Economic Forecast suggests that while there are significant uncertainties due to new tariffs and government policies, the economy is still expected to grow, albeit at a slower pace of 1.6% in 2025 compared to 2.8% in 2024. This forecast implies that while risks are increasing, a recession is not a certainty.

Furthermore, the World Economic Forum and other economic analyses emphasize that while recession risks are rising, various factors such as consumer spending and business investment continue to play a crucial role in shaping the economic landscape. The JPMorgan report also highlights that while projections show a decline, it does not definitively indicate a recession.

Conclusion

The claim that "we are headed for a recession" is Partially True. While there are significant indicators suggesting a downturn, including declines in leading economic indicators and increased recession probabilities, the current economic forecasts still predict growth, albeit at a slower rate. The situation remains fluid, and while the risks are heightened, a recession is not yet confirmed.