Tariffs are making a recession more likely. Here's what to know.

Are we in a recession?

The big picture: There is no solid evidence that the United States is currently in a recession.

• The warning signs that have emerged include some surveys of expectations and drops in the stock market, which do not predict recessions reliably. As one famous line goes, "the stock market has predicted nine of the last five recessions."
• But the most important indicators for that determination are released with significant lags, so if the economy is starting to lurch into contraction, or does in the months ahead, it will take a while for definitive evidence to arrive.

Who is predicting a recession?

What they're saying: Dimon, in an interview with Fox Business's Maria Bartiromo, said he felt a recession was a "likely outcome."

• "Markets aren't always right, but sometimes they are right, and I think this time they are right, because they're just pricing in uncertainty at the macro level and uncertainty at the micro level, at the actual company level," Dimon said.
• BlackRock CEO Larry Fink said on Monday that most CEOs would agree there was already a recession.

Goldman Sachs, however, predicts the U.S. will avoid a recession, but barely so.

• Goldman Sachs' economic team has been more accurate than most in recent years, and now expects GDP growth of 0.5% this year.
• That forecast assumes tariffs go up by 15% — a big number, but still short of the 20% increase that's in place as of Wednesday.
• If those stay in place, Goldman says it would then expect a recession, albeit a pretty mild one.

Who decides when there's a recession?

Zoom in: The semi-official arbiter of U.S. recessions is the business cycle dating committee at the National Bureau of Economic Research, a private academic group.

• The committee consists of eight esteemed economists who study incoming data and assign dates to peaks and trough of the U.S. economic cycle.

Zoom out: The committee defines a recession as "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."

• The data they specifically cite as particularly important for judging when a recession has begun include personal income (adjusted for inflation but excluding government transfers) and payroll employment. (More detail is here.)

Of note: As of the most recent (backward-looking) readings, those point to continued expansion. Real personal income excluding transfers rose 0.3% in January, for example, and payrolls were up 151,000.

When will we know if there's a recession?

Yes, but: If the economy does turn negative, don't expect any official recession announcement to be speedy; they would rather be sure than be first to make a recession call.

• The group waits "until it is confident that a recession has occurred," the NBER website says, with no doubt about when the economy peaked or bottomed.
• The committee did not declare the pandemic recession until July 2020. By then the recession had been over for two months.
• During the 2008 financial crisis, the NBER did not announce that the U.S. had been in a recession until a year after it had begun.

Reality check: There are instances when it is obvious a recession is underway, even without the official NBER call — like when the pandemic brought economic activity to a standstill.

• Wall Street's rule-of-thumb for a recession is two back-to-back quarters of declining GDP. It is an imperfect gauge.
• Recall 2022 when GDP was reported to have contracted in the first and second quarter, even as the labor market chugged along fine. As it turns out, the data was later revised to show that only the first quarter had contracted.
• The 2001 recession, meanwhile, did not see shrinking GDP for two straight quarters.

The bottom line: If the U.S. economy does tip into recession in 2025, there will be plenty of evidence in the data before the official arbiters make a ruling — but there's no such evidence yet.