Is a recession coming in 2025? Long Island economists weigh in.

Some people across Long Island and throughout the nation are grappling with concerns over the U.S. economy, with many worried about a potential recession this year.

This sentiment marks a dramatic turnaround from just a month ago, when stock indices reached record highs and consumer confidence was on an upswing.

Some local economists interviewed by Newsday said the economy is relatively stable despite the uncertainty. But they attribute the current economic unease to plummeting consumer confidence, recent stock market declines and an ongoing trade war stemming from President Donald Trump imposing tariffs — and tariff threats — against the nation’s largest trading partners, which include not only adversaries such as China but also key allies such as Mexico and Canada.

The president’s recent remarks might have deepened these concerns.

In an interview with Fox News Channel over the weekend, when asked if he anticipated a recession this year, he stated, “There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.”

He added, “It takes a little time. It takes a little time.” 

Following his comments, online search engines saw a surge in queries such as “is a recession coming in 2025,” “how to prepare for a recession” and “what is a recession.”

Here are four key insights from Long Island economists that might help answer some of the questions on peoples' minds.

What is a recession and what are the warning signs?

The last major recession to hit the country, commonly known as the Great Recession, peaked in 2008 and officially ended in 2009, though the recovery would last several more years. The financial collapse was largely driven by the bursting of the housing bubble, risky subprime mortgage lending and the subsequent credit crunch that sent shockwaves through the global financial system, as employers hemorrhaged jobs and many people lost their homes in the foreclosure crisis.

Several local economists said there are multiple indicators used to determine if a recession might be coming, including increased unemployment rates, a declining stock market, abrupt drops in investment from businesses and declines in consumer spending, especially consumers postponing big-ticket purchases on items such as cars and pricy home appliances. But while consumers may see higher prices at grocery stores or struggle more with other issues of affordability, these economic challenges alone are not sufficient to be considered a recession.

“Economics is not an exact science so there’s not one exact definition,” said Mariano Torras, an economics professor at Adelphi University and chair of its Finance and Economics Department.

Torras said that “historically, a traditional definition has been two quarters in a row of negative GDP growth.” 

Some economists and policymakers might disagree about the exact definition of a recession, but the most widely respected take on the matter comes from the National Bureau of Economic Research, an American private nonprofit research organization that proposes start and end dates for U.S. recessions. According to the group, a recession is defined as a significant decline in economic activity spread across the economy that lasts more than a few months, typically measured by indicators such as real GDP, real income, employment, industrial production and wholesale-retail sales.  

How would Long Islanders know a recession has begun?

Goldman Sachs expects slower growth this year than last year and sees a 20% chance of a recession in the next 12 months, up from 15%, according to a note issued to investors on Friday.

But recessions are hard to project, and there is no immediate way to know if one is happening, economists said.

“You generally only know after its begun because the GDP figures are lagging indicators," said John A. Rizzo, an economist and professor at Stony Brook University. 

When a recession has begun it is largely "determined after the fact," said Shital Patel, labor market analyst with the state labor department's Hicksville office. 

Juan Carlos Conesa, an economics professor at Stony Brook University, said many economists are already concerned about financial conditions being ripe for a recessionary period today.

“When you see investment plans halted, you need to start worrying,” he said. “We are all worrying now.”

Still, other analysts said the chances of a recession are small this year and that the economy remains relatively stable. 

What should Long Islanders do in the event of a recession?

“The answer to that question would depend on the particular individual,” Torras said. “A lot of it has to do with our tastes, our expectations, and what we can do without."

As Torras said, there's a lot of variability in how people might respond. But there are some common-sense conventions.

“Typically, the consumer, in the face of uncertainty, is going to cut back on discretionary purchases, is going to travel less, and pull back spending on more big-ticket items," Patel said.

However, she said, those very actions also contribute to a recession as reduced consumer spending leads to declines in business revenue, which can result in job layoffs.

Who is impacted most by a recession?

A recession would hurt Long Islanders across the income spectrum and affect businesses big and small.

But that pain is usually felt unevenly. 

“The people who are impacted the hardest, quite simply are those who have the least means,” Torras said. “Someone who has a few businesses, maybe they have to tighten their belt, lay off a few employees and watch their spending, but they are not affected in the same way.”

Conesa said affluent people might see their investments lose value, but they have the means to cushion these changes."

"Many workers are not that lucky, and recessions really affect their ability to make ends meet," he said.