Is the U.S. economy headed toward a recession? Here’s what to look for.

Concerns are heightening that the U.S. economy is heading toward a recession as the stock markets slide amid the Trump administration’s implementation of tariffs.

President Donald Trump and his senior advisers appeared optimistic that an economic boom is on the horizon, even as economists warn that the likelihood of a recession is being amplified by the White House’s sweeping tariffs.

Trump has not taken the possibility of a recession off the table, telling Fox News anchor Maria Bartiromo on “Sunday Morning Futures” that he hated “to predict things like that.”

“There is a period of transition because what we’re doing is very big,” Trump said in the interview Sunday. “We’re bringing wealth back to America. That’s a big thing. And there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.”

By Monday evening, all three major U.S. stock indexes took a tumble, with projections from experts that the economy might slow in the first three months of the year — a notable turnaround after nearly three years of solid growth, according to J.P. Morgan research Friday. Some economists also warned that the very suggestion of a recession might be enough to cause businesses and households to rethink their spending, which could hasten a downturn.

Here’s what to look out for.

What are the economic signs of a recession?

A recession is defined as six months of negative growth in the nation’s economy.

It’ll take some time before an official recession is declared by the National Bureau of Economic Research, which is the official arbiter of U.S. recessions. The group considers a number of economic factors, including what’s happening in the job market or with people’s incomes, before making a determination.

But warning signs — which can include a surge in job losses, stalling wages and consumers spending less — would probably be evident beforehand.

Claudia Sahm, chief economist at New Century Advisors, says the job market can be an early indicator of a looming recession. The unemployment rate isn’t the first thing to be affected, Sahm said, but once it starts rising, it “tends to keep going.”

So far, the labor market has slowed slightly but remains strong, with unemployment at 4.1%, according to the February jobs report. However, the most recent data did not contain all the impacts of Elon Musk’s U.S. DOGE Service slashing the federal workforce.

Is the U.S. headed for a recession?

Economists aren’t certain whether the United States is headed for a recession. But they are warning that the risk of one is probably higher than previously thought, in large part because of new White House policies.

“People are looking at tariffs, saying, ‘If we revisit the economic history books, tariffs have not been great in terms of promoting growth,’” said Mike Schumacher, head of macro strategy at Wells Fargo. “The probability of a recession has gone up — it’s not a given or even 50%, but whatever your [forecast] was a few weeks ago, it’s definitely higher now.”

Goldman Sachs raised its 12-month recession probability from 15% to 20% Friday, noting that it saw “policy changes as the key risk.”

“The White House has the option to pull back if the downside risks begin to look more serious,” a Goldman Sachs economic forecast said. “If policy headed in the direction of our risk scenario or if the White House remained committed to its policies even in the face of much worse data, recession risk would rise further.”

The J.P. Morgan analysis said that Trump’s frequent changes to trade policy “make forecasting growth and inflation this year an especially fraught exercise.”

When was the last U.S. recession? How long do they last?

The average modern-day recession has lasted for 11 months, according to NBER data.

The last U.S. recession, which was also the shortest in U.S. history, was the economic downturn of March and April 2020 during the coronavirus pandemic. It was not declared a recession by the NBER until July 2021.

Before that, the Great Recession of 2007 to 2009 lasted for 18 months. It is considered to be the worst U.S. economic disaster since the Great Depression.

Can tariffs cause a recession?

Trump’s proposed tariffs could have a big impact on the economy, depending on the duration and any potential retaliation from trading partners, according to economists from BNP Paribas.

“In the event of an uncontrolled tit-for-tat trade war, a sharp decline in business sentiment is possible and, if large enough, could be recessionary,” BNP Paribas wrote in its Markets 360 analysis Thursday.

BNP Paribas warned that the larger the tariff, the greater economic cost it will have. That impact, BNP Parbis said, will probably be felt by the average U.S. consumer. The latest tariffs are expected to cost the typical American household more than $1,200 a year, according to the Peterson Institute for International Economics.

Even if the tariffs are temporary, simply leveraging them as a negotiating tool will cause uncertainty to businesses and firms’ hiring or investment decisions.

How does a recession affect the public?

Recessions typically correlate with expansive job losses, which spark financial problems that can lead to eviction or foreclosure.

The contracted job market of a recession also hurts those who keep their jobs, making it harder to find a new job or get a raise. Young people entering the workforce during a recession often feel they can’t afford to be choosy about employment, and many will accept low starting pay that can set back their earnings for years to come.

“At the end of the day, recessions are bad because people suffer financially,” Sahm told The Washington Post in 2022. “They’re a big hit, and they touch everyone.”

What should I do to protect my finances before a recession?

Economists and financial advisers say the prudent move is often to tighten your purse strings and try to save money. However, doing so can actually hasten a recession because it takes money out of the economy.

“When they’re not spending, then they’re not creating income for others,” George Washington University economics professor Tara Sinclair said in 2022.

Michelle Singletary, The Post’s personal-finance columnist, offered seven tips to prepare for a recession in 2022. Among them: Pay off credit card debt, build up your savings, look at low-volatility options such as bonds and don’t panic.

“What you shouldn’t do is make moves based on fears that can put you in a worse position financially,” she wrote.