Odds of U.S. recession declining: NABE economists

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'Barron's Roundtable' panelists take a closer look at the President Donald Trump's impact on the markets and more.

The U.S. economy entered 2025 with a steady hand, according to the National Association of Business Economics, a group of the nation’s leading economists, with the chance of a prolonged slowdown falling. 

«The odds of a recession continue to diminish according to panelists, with the downside risks largely tied to uncertainty over the implementation and timing of policy proposals from the new administration» said NABE President Emily Kolinski Morris, CBE, global chief economist, Ford Motor Company, in the group’s January Business Conditions Survey taken from Dec. 30, 2024, to Jan. 13, 2025.

President Donald Trump, who took office a week ago, hit the ground running, rolling out a series of pro-business executive orders tied to making the U.S. more open to cryptocurrency, easing energy restrictions and freezing the hiring of federal workers as his DOGE, Department of Government Efficiency arm, assesses areas to cut waste. 

Additionally, he announced a $500 billion investment from OpenAI, Softbank and Oracle to expand artificial intelligence in the U.S. He is also threatening tariffs against Canada, Mexico and China.

Still, inflation remains a headwind. While 65% of NABE’s economists see prices stable over the next three months, 35% expect price increases, an uptick from 28% polled in October.

The consumer price index last month rose 2.9% annually and 0.4% vs. November. Core CPI, which excludes volatile food and energy, rose 3.2% annually. Inflation is well below its 9.1% peak in July 2022 but still above the Federal Reserve’s preferred 2% goal. 

INFLATION RISES 2.9% IN DECEMBER, IN LINE WITH EXPECTATIONS

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