Although De Noire is based in Europe, she believes that economic upheaval in the United States "triggers huge uncertainty" across the pond because of America's global influence. De Noire first noticed a decline in business right after Donald Trump was elected in November 2024, as Americans and the rest of the world anticipated upheaval. "I didn't even bother working South by Southwest because the first Friday night I attempted to work, I walked into a completely empty club and didn't make any money at all,"
Economist Claudia Sahm is an expert (if not the expert) on the conditions that presage a recession and how policymakers should react as a result. She is the creator of "the Sahm Rule," an employment indicator monitored by everyone from central banks to the global financial giants. The Sahm Rule says that a recession is likely when the three-month moving average of the national unemployment rate rises by 0.5 percentage points or more, relative to the minimum of the three-month averages from the previous year.
We are now at a level where we can't tax anybody any more, but we can't borrow any more, so we are really at the mercy of those people we've borrowed from, so if they lose confidence in us, we have serious issues.
When describing the health of the US economy, there is a temptation among economists, market analysts, and politicians to argue that the only true picture of our current situation is a sweeping portrait - only by looking at the broadest of aggregate statistics can you determine the state of play, they argue. But the wide view can ignore important developments unfolding under the surface. Sometimes, even the healthiest-looking person might have high cholesterol.
"The algorithm has identified building permits as the most critical economic variable for predicting recessions. And while permits had been holding up reasonably well, as builders supported sales through interest rate buydowns and other incentives, inventories of unsold homes are now high and on the rise," Zandi warned. "In response, builders are pulling back, and permits have started to slump. They are now as low as they've been since the pandemic shutdowns."
There are certain words you don't want to hear in a medical checkup, or in an investment bank's recession outlook: "stable but elevated." It's a phrase that could refer to blood pressure, even risk of a heart attack, a favorite metaphor of hedge-fund legend Ray Dalio, or in UBS' evaluation, risk of a recession.
