I’m an Economist: Here’s How Likely a Recession Is for the Second Half of 2025
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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We’ve officially made it through the first half of the year without a recession, but will that hold true for the rest of the year? Many Americans are not optimistic that we will make it through 2025 unscathed — a recent survey of 2,000 Americans conducted by Talker Research and Affirm found that 58% believe a recession is inevitable.
To find out if there really is cause for concern, GOBankingRates spoke with Ryan Severino, chief economist at BGO, to get his predictions for the latter half of 2025.
A Recession in the Second Half of 2025 Is ‘Unlikely’
I still think a recession is unlikely, but the trade policy situation increases the risk. The economy has a lot of momentum and solid underpinnings — a tight labor market, wage growth in excess of inflation, interest rates that remain lower than relatively recent highs, good if not great productivity growth, and the AI boom is picking up steam. That doesn’t make the economy immune to a recession, but it helps to insulate it well.
Trade Policy Will Be the Make or Break Factor When It Comes To Recession Risk
Right now everything is hinging on trade. This is partially because of the direct impact it could have, but also because of the heightened uncertainty it is creating. If we could at least move to a point of clarity on this, it would help a lot.
The U.S. doesn’t actually import a lot relative to the size of the economy — certainly not relative to other advanced economies. But trade policy is hanging like the Sword of Damocles over anyone trying to make important economic decisions, especially ones that have long-term implications.
Americans Should Always Be Ready To Face Uncertainty
I always think it is good to be prepared [for a recession] but not panicked. The world, including the economy, is unpredictable. There are definitely no guarantees in economics. But I never want to scaremonger, especially not when most of what’s happening in the economy remains positive.
It is always a good idea to have a rainy day fund. That doesn’t mean it needs to get built overnight. But think of it like Andy in “Shawshank Redemption” or the Colorado River through the Grand Canyon — small incremental changes compound to big differences over time.
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