In early 2025, concerns about the trajectory of the US economy have intensified, with multiple indicators pointing to a potential recession or even stagflation—a scenario economists consider more severe than a typical downturn.
A recent article from the Daily Mail highlights a disturbing trend: Americans are missing payments at unprecedented rates, a sign that financial distress is mounting and the economy may be teetering on the edge of a recession.
The Daily Mail reports that the Atlanta Federal Reserve has projected a significant GDP contraction of 2.8% for the first quarter of 2025, which, if realized, would mark the first economic decline since 2022 and the most severe since the COVID-19 shutdowns in early 2020.
This projection has fueled fears of stagflation, a toxic combination of stagnant economic growth, rising unemployment, and persistent inflation.
Mark Zandi, chief economist at Moody’s Analytics, told CNBC, “Inflation expectations are up.
People are nervous and uncertain about growth,” though he noted that the Federal Reserve’s vigilance would likely prevent a return to the severe stagflation of the 1970s and 1980s.
Stagflation is particularly concerning because it lacks the silver lining of a typical recession, where inflation often subsides.
The Daily Mail explains that President Donald Trump’s proposed tariffs, including a 25% levy on goods from Canada and Mexico, could exacerbate price increases, particularly in industries like automotive, where supply chains are deeply integrated across North American borders.
Estimates from the Anderson Economic Group suggest that these tariffs could drive new car prices up by $4,000 to $10,000, further straining consumers already grappling with high costs.
The Daily Mail also notes that Trump has acknowledged the potential for short-term economic disruptions due to his tariff policies but argues they will ultimately foster prosperity.
However, the immediate market response has been negative, with the Dow Jones Industrial Average dropping significantly in early March 2025, reflecting investor unease about the economic outlook.
In contrast, some voices remain optimistic. Kyle Bessent, cited in the Daily Mail, dismissed fears about recent stock market declines, describing corrections as “healthy” and predicting strong market performance if the administration implements favorable tax policies, deregulation, and energy security measures.
This perspective underscores the divide among analysts, with some viewing current challenges as temporary, while others see deeper structural issues.
The fears of recession in 2025 echo earlier concerns from 2022, when the US economy contracted for two consecutive quarters, meeting the informal definition of a recession.
CNN reported in June 2022 that GDP shrank at a 1.6% annualized rate in the first quarter, followed by a 0.9% decline in the second quarter, as confirmed by the Bureau of Economic Analysis.
Despite these contractions, the National Bureau of Economic Research did not officially declare a recession, citing robust job growth and other positive indicators.
In 2024, the economy appeared to rebound, with the Daily Mail reporting a 3.3% GDP growth rate in the final quarter, driven by strong consumer and business spending.
This growth defied expectations of a slowdown and raised hopes of a “soft landing,” where inflation is tamed without triggering a recession.
However, the resurgence of inflationary pressures and policy uncertainties in 2025 have shifted the narrative back toward caution.
The US is not alone in facing economic challenges. In the UK, the BBC and Reuters reported that revised figures for 2023 showed a 0.1% GDP contraction between July and September, raising fears of a mild recession.
Similarly, the Daily Mail noted in December 2024 that the UK economy flatlined in the third quarter under Labour’s leadership, with growth revised down to zero.
These global parallels suggest that broader economic headwinds, including high interest rates and geopolitical tensions, are contributing to the uncertainty.
