--- title: 7 Reasons Why a Recession Will Not Occur in the US in 2025 description: Learn about the reasons why ITR Economics is not forecasting a recession in the US in 2025 and how we forecast under these uncertain circumstances. image: https://blog.itreconomics.com/hubfs/BlogImage_BB_05152025.png --- News # 7 Reasons Why a Recession Will Not Occur in the US in 2025 Learn about the reasons why ITR Economics is not forecasting a recession in the US in 2025 and how we forecast under these uncertain circumstances. [ ITR Economics ](https://blog.itreconomics.com/blog/author/itr-economics) May 15, 2025 --- Despite seemingly widespread concerns about economic recession stemming from uncertainty over several issues (chiefly tariffs at the moment), our analysis suggests that the United States will avoid a recession in 2025. Some of the reasons for this conclusion are presented below. ## Why We Think a Recession Is Not Probable for 2025 - Consumer spending, which accounts for approximately two-thirds of US GDP, is growing. Our ITR Retail Sales Leading Indicator™ is pointing toward more growth in Retail Sales. Ongoing rise in inflation-adjusted earnings and after-tax income supports that input. The data is weekly as well as monthly and shows that consumer activity, while not robust, is strong enough to keep the economy afloat. - Consumer debt levels get a lot of attention, but the latest data is not indicative of a high consumer distress level. There are indications that those in lower income levels are feeling distress, but the lack of confidence in the economy is not translating into economic withdrawal. - The April Jobs Report was positive news for the economy. While it is certainly possible that job growth will slow, there are no signals yet that slower jobs growth – because of potential corporate earnings pressure – will turn into problematic unemployment. - Monetary policy is more accommodative than it is restrictive. While most folks seem to want lower interest rates, which may not be occurring in the near term, the monetary policy considerations are positive and helpful to keep the economy moving forward. - Leading indicators, including the ITR Leading Indicator™ and the ITR Financial Leading Indicator™ are pointing to gradual rise taking place in 2025. Our updated analysis suggests that Capital Goods New Orders will also gradually improve as the year unfolds. - Businesses are acting to change supply chain sources to reduce the impact of tariffs upon themselves and therefore ultimately reduce some of the ill-effects that flow to the consumer. The speed at which businesses are addressing this issue is important. - Uncertainty is likely to fade as we get deeper into the year because trade deals will occur, businesses will have better clarity on what the rules are regarding tariffs, and the government will move on toward the tax aspect of their agenda. Improved clarity does not mean the situation will be “fair” or that loopholes will be closed. Clarity will provide businesses with the means to be proactive with greater confidence. [![  Ensure Financial Stability Throughout the 2030s Great Depression   We are just a few short years away from the Great Depression of the 2030s. What are you doing to prepare your business for the coming decade? Are you asking the right questions to make sure your company is well-positioned for the economic downturn?  ](https://no-cache.hubspot.com/cta/default/4424930/interactive-189206265149.png) ](https://blog.itreconomics.com/hs/cta/wi/redirect?encryptedPayload=AVxigLL0BVQiz7W73lasTIdd5DY8472fDh2x8dndN3F3MKAz%2Fc%2BtghS%2FOtvFeJt0UxLpyRGOvwD%2FWzOURAxdaJ6LjKTtqGwAp7DrA1cx27RNet84uEjero8%2BApAtFQ7s0JSN328KOOcY1C6N7MylnUhY9JVfOQiyhdRmE%2BYoxjLhHfK6JvxHm%2B2i4Zv6scGdfGoxQa53RAANL8rXcRWRB5LDAKdKLlKlKuIsI16FlhQv3yqSfymmAfsGPA%3D%3D&webInteractiveContentId=189206265149&portalId=4424930) ## How Can ITR Economics Forecast When There Is Uncertainty? Practice. We have forecasted through perilous times before. Recent extreme examples are COVID and 9/11. Some of the tools we use: - Being data oriented instead of reacting to anecdotal news - Using weekly data and knowing what data is most pertinent - Understanding that the key to success includes analyzing demand-pull issues from consumer and business perspectives - Finding similar occurrences and extrapolating those prior lessons into the current environment - Asking the right questions at the company, market, and macroeconomic levels ## Conclusion ITR Economics’ forecast accuracy through perilous and uncertain times is on record for all to see. Look at the May 2025 Trends Report Executive Summary to see how we did in 2020 and 2021. We know times are tough for some and good to great for others. “How could you possibly know…” is a refrain we have heard before. When you have been in business since 1948, you learn a lot along the way. [News](https://blog.itreconomics.com/blog/tag/news) ## Similar posts Executive Strategy ### [Changes to Fall 2024 Macro Forecasts and Looking Ahead to 2025](https://blog.itreconomics.com/blog/changes-to-fall-2024-macro-forecasts-and-looking-ahead-to-2025) We have revised our US Real GDP forecast for 2025 as well as our forecast for growth in the industrial sector. Learn more about these revisions here! Eric Post Oct 25, 2024 Executive Strategy ### [Forecasting Without Action Is a Missed Opportunity](https://blog.itreconomics.com/blog/forecasting-without-action-is-a-missed-opportunity) Forecasting creates value when it informs actionable decisions. Use foresight to make incremental changes and reduce risks for a competitive edge in... ITR Economics Jan 6, 2026 News ### [Buying or Selling a Business? How ITR Can Help](https://blog.itreconomics.com/blog/buying-selling-itr-can-help) However, what makes ITR truly unique and different from other economic forecasting firms is our proprietary business cycle forecasting methodology. ITR Economics Feb 26, 2020 ### Free Economic Updates from ITR Economics Hear the latest economic news from our experts, stay in the know with our frequent blogs, and get a first look at ITR Economics’ latest promotions – all free with our economic updates! Join our email list today to receive these insights. ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "ITR Economics", "url" : "https://blog.itreconomics.com/blog/author/itr-economics" }, "dateModified" : "2025-06-11T18:22:54.044Z", "datePublished" : "2025-05-15T14:35:32.000Z", "headline" : "7 Reasons Why a Recession Will Not Occur in the US in 2025", "image" : [ "https://blog.itreconomics.com/hubfs/BlogImage_BB_05152025.png" ], "mainEntityOfPage" : { "@id" : "https://blog.itreconomics.com/blog/7-reasons-why-a-recession-will-not-occur-in-the-us-in-2025", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.itreconomics.com/hubfs/ITR%20Logo%20-%20Light%20Backgrounds-1.png" }, "name" : "ITR Economics" } } ```