Source: Pocketproposition
Is the U.S. economy heading towards recession? A recession occurs in any country when the country faces economic decline (GDP) for consecutive two quarters of the year. A recent SBI report shows that the USA has been facing a declining trend in terms of its economy, and the GDP is declining. After Donald Trump gave the tariff measures, the outlook of the US economy is such that economists are fearing about the country's GDP.
What has been there in the SBI report?
Seeing Trump's trade conflict economists are fearing the jobs, U.S. economy, consumer cost, diminished employment opportunities, the spendings, and the overall job style in the whole USA. In its latest report of SBI, it has been said that the jump that USA has faced in 2020 after the COVID 19 was as a result of policy extravaganza. Any kind of long trend in this situation may result in a downturn in the economy.
During the time of COVID-19, the US had a great performance while coping with the COVID crisis and it had a remarkable strengthening economic condition. But because of a few uncertainties the USA and its economic trend is facing a huge downturn, showcasting that usa may face a huge recession in the next few months. So is USA really heading towards the recession or is just a period that USA had to face because of a few downturns.
How was the GDP in the USA Since COVID-19?
According to a report by SBI, the analysis of GDP reveals a downturn trajectory since 2000. There is a reduction in the potential GDP a weakening demand and the investment pattern.
The recession graph since 2022- In Q1 of 2022, GDP was 4% which further declined to an extreme down level of 2.5% and it became 1.3% until it reached Q4 the same year. In the Q4 of 2023, the GDP was 3.2% which became 2.5% in the Q4 of 2024. In the year 2025, the GDP which was around + 2.9 in January became - 2.4 on 6th March.
How The U.S. Economy Has Been Affected Implications Of The Tariff Imposed By Donald Trump?
The debt is rising at the national level of the USA and there is diminishing participation of the private sector in the overall growth of the country. Additionally, the current trade policies that have been made for the tariff (imposed by Donald Trump) faced immediate challenges, without substantial improvement in GDP. The productivity growth factor is diminishing and the value addition further shows negative progression. In this situation, if there is any elevated wage, it may further deter future investments. The ratio of savings to GDP has reached its lowest point since 2011 and has reached the second lowest-marked level since 1951.
In January 2025, the first decline was noted when consumer spending was low in nearly 24 months. In order to avoid tariff implications, the businesses are accelerating the imports. Eventually, the trading in terms of goods has reached an extremely low level. Additionally, the consumer expenditure trend has also weakened in correlation with the projected overall GDP.
After the presidential election of 2024, during November month, the stock market had exponential growth and it again showed a downturn when the time reached March 2025, showing an extremely poor performance since the COVID-19 period. The reason behind all these inflation and deficit activities happening in the U.S. economy is stated as the Donald Trump’s tariff – the tariff over the goods and services and their import & export trading, creating market instability and a permanent recession in forthcoming period.
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