It’s the “will they, won’t they” arc of the summer. And we’re not talking about our favorite TV show, The Summer I Turned Pretty.
No, the question on our mind is: Will there be a recession soon, or won’t there? And like a lot of relationships, the answer is complicated.
After a tumultuous first half of the year of bad workforce breakups, trade deal make-ups, and tariff uncertainty experts told CFO Brew they expect an economic slowdown, but aren’t convinced a recession is imminent.
By the numbers. Earlier this year, CFOs seemed to be strapping in for a recession. In March, 60% of CFOs in a CNBC survey said they expected a recession in the back half of 2025. Two months later, a study from Billtrust said that “more than four in five financial decision-makers” thought a recession within the next year was likely or possible. And 97% of CFOs surveyed were starting to bunker down with more careful cash management and budgeting, according to the Billtrust survey.
But as the year progressed and tariffs continued to be delayed, recession fears began to ease in the C-suite. In July, a survey of 122 CEOs from The Conference Board showed that in Q3, only 36% feared a recession in the next 12–18 months, a substantial drop from 83% in Q2.
“There are a few things that have changed CEOs’ minds,” Stephanie Guichard, senior economist of global indicators at the Conference Board, told CFO Brew. “One is, I think they understand a bit better where we are going with the tariffs…A lot of the uncertainty has disappeared. There is still uncertainty remaining. But I think they are getting used to uncertainty.”
Not so fast. But then came the third-act twist. A July jobs report from the Bureau of Labor Statistics showed unemployment rose to 4.2%, and revised the May and June jobs numbers dramatically downward, wiping out about 90% of the jobs supposedly added in those months. While the unemployment rate hasn’t increased dramatically, hiring is at a standstill, according to Douglas Holtz-Eakin, president of the American Action Forum. Guichard agrees.
News built for finance pros
CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.
“It’s more difficult than it was last year or the year before to find a job,” Guichard added. “But they are not worried about losing their jobs.”
Also, the July consumer spending report remained largely flat, while the Producer Price Index rose 3.3% YoY, signaling recession risk—prompting Mark Zandi, chief economist at Moody’s Analytics, to post on LinkedIn in early August, “The economy is on the precipice of recession. That’s the clear takeaway from last week’s economic data dump.”
But that might have been a little dramatic. However, the economic data might fall short of a full-blown recession, according to Holtz-Eakin
“I am quite confident that economic growth is going to slow in the second half of this year,” he told CFO Brew. “I am concerned about the probability of a recession, but I’m not convinced we’re going to go negative.”
Guichard agreed that her data predicts a “substantial slowdown” and “relatively weak growth” this and next year, “but no recession.”
The biggest factor Holtz-Eakin sees contributing to the decline in growth is President Trump’s tariffs. The estimated $380 billion tax increase per year from the tariffs will be a strain on the economy, raising costs and causing higher inflation, he said.
“[It’s] going to keep the Fed in the uncomfortable position of having to worry about inflation and interest rates can’t be cut as easily,” he said. “It’s going to eat into purchasing power by households and businesses, and that’ll slow growth.”
Like we said, complicated.