Ten Signs 2025 Will Be the Year of the U.S. Recession

Clearly, the timing of this article will lead many to dismiss it out of hand as “cope.” However, the recent change in the U.S. executive and legislative branches is not the heart of this matter. The United States of America is still, despite factors such as tariffs and income inequality, a consumer economy, and consumers are in a much more precarious situation than many realize. That’s been the case for months and months. Unless emergency measures comparable to the 2020 pandemic are undertaken, signs indicate that 2025 will be remembered for a major economic downturn to rival 2008.

Related: 10 Business Scandals So Big They Shook the Economy

10 Agricultural Disasters

If there’s one thing an objective appraisal of global agricultural conditions will show, it’s that 2024–2025 is poised to be a calamity for many crops around the world. For example, the world’s leading cocoa grower, the Ivory Coast, experienced such a bad harvest that in 2025, chocolate prices are expected to rise as much as 25%. In the United Kingdom, the 2024 harvest was the worst since 1983 by roughly 15% across crop yields, meaning a lot more motivation to buy crops overseas and thus increase the global price. Much of the rest of Europe has suffered similar environmental disasters.

Domestically, in 2024, American farmers had their worst crop profits since 2007. This means there will be far fewer investments in it for 2025, and with fewer people investing in farms, the supply will go down. Indeed, in 2024, 75% of farmers surveyed said that they believed their industry was already in a recession. With farming being such a bedrock of the American economy, expect massive financial damage to trickle out.

A much more alarming story is being buried right now. On January 16, 2025, the Moss Landing lithium battery factory in Monterey County, California, began a long-burning fire. The blaze released toxic heavy metals that were announced to be a huge threat to local endangered wildlife reserves. More significant was that this is very close to Salinas County farms. Salinas County is known as “America’s Salad Bowl” since it grows more than 30% of all lettuce in America and 50% of its strawberries, cauliflower, and broccoli.

Farmers in the area reported suffering symptoms of poisoning from the fire’s fumes, and they would not consider their own crops safe to eat. That means a giant amount of the nation’s crop yield is either toxic or likely to be thrown out as a security measure, all from a single fire. This goes to show just how vulnerable crop yields in America really are, despite many Americans taking food practically for granted.^[1]

9 Commercial Real Estate Collapsing

The dispute between the desire for employees to work from home and for employers to have their employees come to offices has been a passionate one since the end of the pandemic lockdown in 2021. Commercial real estate values indicate that the employees have gone far toward winning. In 2024, across many cities from Baltimore and Washington D.C. to Minneapolis and Houston, office buildings were reevaluated with extremely severe drops in price. For example, in Houston, the average was 57%. In Minneapolis, the Forum Office Towers sold for a jaw-dropping 91% off their sales price from 2019.

Despite these massive drops in property values, owners and lessees have been having difficulty paying property taxes. Between September 2023 and 2024, commercial real estate foreclosures rose 48%(9c). This is not along a political divide: In New York, the rate was 48%, and in Florida, it was 49%.

To many denizens of smaller communities who hate cities anyway, this may mostly seem a cause to point and laugh. The thing is, though, that when states lose property tax revenue from one sector, they have to either cut public services or raise taxes elsewhere. Thus, residential prices, which are extremely high, if not dangerously inflated, are in a position where high taxes are looming over them.

These can be increases in rates almost as bad as urban commercial real estate values in reverse. For example, in the Utah towns of Charles and Joseph, in 2019, residential property taxes climbed 130%.^[2]

8 Credit Default

As often as the National Debt is called into service as a talking point, consumer debt is such a ubiquitous problem that it usually isn’t mentioned, just like the dust on city streets. And 2024 still saw a growth in the problem that harkens back to much financially darker periods in contemporary American history. By September 2024, $46 billion in credit had been defaulted on.

For companies such as Capital One, this increased the amount of debt deemed “irrecoverable” to roughly 6% of the total, representing the highest percentage since back in 2010. The problem was naturally concentrated in the lower and lower-middle-income classes, but the higher sections of the middle class are in trouble too, as indicated by the percentage who only made minimum payments, which was the highest it had been since 2012.

In a February 2025 article on the subject, Deutsche Bank economist Brett Ryan insisted to CNN that the debt situation is not yet evidence of a dire economy. The same article dispels a default assumption many will make about people in credit card debt, that it’s due to financial irresponsibility, by profiling the family of Monica Chavez.

Due to the loss of her job and her husband’s injury that left him unable to maintain his small business, the family was left having to avoid medical care, having lost even their retirement savings. Such precarity lurks among many more of the middle class and even the upper class than a cursory look will indicate.^[3]

7 Negative Auto Equity

America’s ability to define itself as a consumer culture is paralleled by its ability to define itself as a car culture, with all the sense of independence that comes with someone having the means to travel anywhere in the country under their own power at any time they want embodied by their vehicles. This habit is getting a growing number of Americans in serious financial trouble, especially as other economic factors are putting an ever-tightening squeeze on them.

Negative auto equity is when a vehicle needs to be returned, traded in, or, in general, provided to a dealership at a loss. While it’s expected for a vehicle to lose a large amount of its value just by being driven off the lot, the automobile publication Edmunds reported how, in Q4 2024, 22% of trade-ins were down more than $10,000. The average amount of negative equity was roughly $6,500. The models where this occurs most often are Kia, Jeep, and Tesla. Combine those with credit defaults, and it begins to come to light just how much debt Americans are really in.^[4]

6 Slowing Housing Market

Considering its prominent role in the 2008 recession and in the hopes and dreams of American Millennials, there have been many who have long anticipated the absurdly inflated prices of the residential real estate market providing the catalyst for our next recession. In recent years, homes have been bought in large numbers at inflated rates by conglomerates like Zillow, Blackstone, etc. Inflated is no exaggeration, with homes visibly uninhabitable selling for hundreds of thousands of dollars. Indications are appearing in the market that this is about to be corrected in a way that will be disastrous for millions of homeowners.

In recent years, houses have sold in under a week to corporate buyers. However, at the end of Quarter 4 of 2024, approximately 55% of available houses had been unsold for 60 days. As CNBC reported, that was a 50% increase in the volume that was unsold after that long of a listing period in Q4 in 2023. Mortgage rates were an extremely high 7% at the time, and rather than correcting as evidence of market exhaustion was surfacing, prices instead went up 3.6% year-over-year, which is classic bubble behavior.^[5]

5 AI Bubble Bust

The largest tech companies in America are all heavily invested in implementing machine learning. Between Meta, Amazon, Alphabet, and Microsoft, the pot is projected to be $320 billion for 2025 alone. That’s more than all the profits from agriculture in the U.S. annually ($267 billion). Beyond issues such as the ecological concerns of AI, such as the millions of gallons of water that get polluted through being used as a coolant for servers, it’s a huge amount of the U.S. economy to be invested in a single, unproven piece of technology.

This is why it was such a cause for concern when a single Chinese company spent $6 million to develop the product Deep Seek, which was at least a rival to the multi-billion dollar investments the U.S. had put up against it. When it was announced on January 27, 2025, the tech sector lost $969 billion on the stock market, more than three times the entire investment. While, as is often the case with such dramatic losses in the stock market, the recovery was swift as well, it went to show just how risky and costly the investment in artificial intelligence has been. If exposed as a failed investment, it will take whole segments of the economy down with it.^[6]

4 Bankruptcy Creep

With many aspects of the economy slowing, bills and expenses are catching up to growing numbers of investors and asset holders. It’s not just that bankruptcy rates are higher now in 2025 than during the same period in 2024, but that they’re dramatically higher both in overall filing rate and degree of severity. In 2025, the number of weekly filings averaged 9,175, whereas in the same period in 2024, it averaged 7,338.

Chapter 7 is also increasing in pervasiveness compared to Chapters 11 and 13. This is particularly ominous because it means that more business entities are forgoing attempts to restructure their payment plans in favor of liquidating their assets to pay off debts. This has been part of a years-long trend instead of a short-term spike. Over the course of 2023, non-business bankruptcy filings increased 16.8%, and business bankruptcy filings increased over 30%. These rates are lower than they were pre-pandemic.^[7]

3 Raw Material Shortages

Beyond agricultural uncertainty, there are plenty of other vital industries in America that are in a troublesome position. For example, America has experienced a lumber shortage to varying degrees since the pandemic. Throughout 2024, prices for lumber used in construction rose 17.2%, and costs are projected to increase again in 2025. That means a lot of cuts into the profit margins for construction companies, repair projects, etc.

Mining is facing similarly vast but specifically different problems, wherein a growing shortage of mine workers is on the verge of becoming vastly worse. Nearly half of the roughly 500,000 miners currently working will reach retirement age by 2029. Considering how grueling mining is on the body, raising the retirement age for miners will not go well. By the end of 2025, there will already be so many retirements that it will greatly disrupt the industry. Even before the effects of this become too dire to ignore, there are already growing shortages of particularly precious minerals such as antimony, heavily used in sensitive communication equipment tech. Most antimony is currently mined by America’s trade rival, China and its allies.

The last industry to consider for this list entry is fishing. Not surprisingly, 40% of commercial fishing in the United States is done around the state of Alaska. In that area, fish populations have been plummeting for decades. Between 1974 and 2020, migratory fish populations dropped 81%. In 2024, fish yields in the Yukon River had become so bad that Alaska and Canada filed a joint resolution to suspend chinook salmon fishing for six years.

Nationwide, fisheries are finding the demand for fish massively exceeds their ability to supply them. This is not unique to the U.S.: In May 2024, the Washington Post reported that fish in catches were literally shrinking over the years because populations were having various factors disrupt their growth. That’s a lot of trouble for an industry that generates more than $140 billion in revenue annually.^[8]

2 2024 Economic Deceptions

During the U.S. presidential election, much data was carefully manipulated before being presented by the incumbent party to paint a much brighter picture of the economic situation. In 2025, news outlets such as Politico began to report the ugly truth. Throughout 2023-2024, data analysts noted that the unemployment rate hovered around 4%.

However, if you factor in Americans making sub-poverty wages of $25,000, at which point they would be regarded as functionally unemployed, then the unemployment rate in a very real sense climbs to roughly 23.7%. While the median wage at the time was widely reported to be $61,900 for full-time employees exclusively, when part-time employees are factored in, the median wage becomes $52,300.

Meanwhile, purchasing power has dropped at an equally alarming and misleadingly reported rate. In 2023, the cost of living was reported to have increased only roughly 4.1%. However, a review of a wider number of prices found that for many Americans, the cost of living had increased by a destabilizing 9.1%.^[9]

1 Mass Layoffs

This does not refer to the mass federal layoffs in conjunction with the DOGE since the results of those layoffs are not yet known at the time of writing. This refers to private sector jobs being lost in mass numbers and excludes such issues as mass retirements, as referenced in Entry #3. For starters, Meta is laying off 3,600 employees in a year when the tech industry overall laid off 95,000. Manufacturing has also been hit hard. John Deere laid off 2,000 employees in Iowa alone last year.

As bad as those layoffs are, they’re actually dwarfed by the largest mass layoffs of 2024-2025. Nissan laid off 9,000 employees in that period, Amazon 12,000 employees, and Sam’s Club 11,000. Given how beleaguered Boeing has been by recent plane failures, it’s not surprising it laid off 17,000, but no less devastating.

Topping this off is Citi, which laid off 20,000 employees. The U.S. economy has endured mass layoffs in the past, but if we’re looking at the health of its economy as it is, all the indicators are that these are like infections taking place in a severely immunocompromised patient.^[10]