Northwestern Mutual Study: Most Americans Don’t Think We’ll Have a Recession in 2025
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Gabrielle Olya
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Molly Sullivan
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While recession fears have reached a fever pitch among many experts, most Americans are confident we won’t be in a recession this year. According to Northwestern Mutual’s 2025 Planning & Progress Study, less than half of Americans (48%) believe we will have a recession in 2025. That’s a notable decrease from 2024, when 54% said they expected a recession within the year.
Here’s a closer look at why many Americans feel this way, plus whether their financial behaviors are aligning with this belief.
Why Most Americans Don’t Think We’re Heading for a Recession
There are a number of economic factors that make many Americans feel confident that a recession is not on the horizon.
“More Americans see a strong workforce and job market, and there is hope that a lower interest rate environment will positively impact the housing market,” said Christopher Koon, partner and financial advisor at Socium Advisors, Northwestern Mutual Private Client Group. “We are also starting to see manufacturing activity recover from two-plus years in contraction and small business optimism rebounding — which could lead to more hiring and capital expenditure plans later in the year.”
Older Americans Are Less Likely To Believe We Are Headed for a Recession
The Northwestern Mutual study found that there are generational differences when it comes to expectations for a recession. Boomers are the least likely to believe we are headed for a recession, with only 36% believing that the economy will head into a recession over the next year. On the other hand, 62% of Gen Z believes we are headed for a recession.
“In my experience working with clients, I find that older Americans have been through recessions, down markets and have weathered different economies,” Koon said. “They understand that it’s been 13 years since we’ve had a down market, and in some ways, it could be beneficial.
“Younger Americans haven’t seen anything like this before,” he continued. “The lack of experience in the market breeds uncertainty.”
Americans’ Financial Behaviors Don’t Reflect a Pending Recession
The study also provided insights into Americans’ various financial behaviors, and their actions don’t seem to be reflective of an upcoming economic downturn.
“We’re not seeing evidence of people hunkering down,” Koon said. “Sixty-three percent of Americans say they plan to spend the same or more this year than last year, while just 34% say they’ll spend less, and 3% are not sure.”
Even Gen Z, who claims to be the most worried about a recession, are not displaying this hunkering down behavior. In fact, they are doing the opposite.
“Gen Z stands out as ‘Spend Z,'” Koon said. “Forty percent of Gen Zers say they expect to spend more in 2025 — well ahead of other generations — while just 29% say they’ll spend less.”
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