Hugh Hewitt shares an excerpt from the Wall Street Journal about the potential of a recession and the stock market.
“Stocks Roar Ahead, Brushing Off Recession Warnings
— Hugh Hewitt (@hughhewitt) May 4, 2025
Wall Street’s best forecasters have been warning that tariffs could spark a recession. Goldman Sachs puts the chances at 45% in the next 12 months. Apollo Global Management’s top economist recently pegged it at 90%.
Someone…
The truncated paragraph of Hewitt's tweet reads as follows.
Someone forgot to tell stock traders. The market is roaring ahead, despite those gloomy predictions, as investors put their faith in solid economic data including Friday’s jobs report, and bank on a swift de-escalation of President Trump’s global trade war.”
What counts as a recession in 2025? Merriam-Webster defines "recession" economically as "a period of reduced economic activity." Where a recession begins and ends may be in the eye of the beholder, or the pocketbook of the capital holder, in this case.
The stock market can go up and down. The Dow Jones Industrial Average closed on Friday, May 2, 2025, at 41,317.43, which is 1,203.93 points higher than its close the previous week, on Friday, April 25, 2025. But the Dow has been down recently as well, trough-ing back near to levels not touched since early in 2024. You cannot rely on market indices alone to tell you what is going to happen or what might happen in the macro economy.
U.S. unemployment is 4.2 percent as of April 2025, the Bureau of Labor Statistics reports. That is not up there with 2020, when there were four months of double-digit unemployment recordings. But 4.2 percent is also not the less than 4 percent recordings that were without exception from February of 2022 until May of 2024. So it is not spiking around up and down, but it has moved its point of gravity from sustained in the 3 percent range to above 4 percent.
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A problem is that inflation, the latest Consumer Price Index release as a basis, is at 2.4 percent. Here is why that is a problem. Since February of 2021, more than four years to the historic side of now, there is not one CPI data point less than that 2.4 percent figure. The Federal Reserve, which, according to its mandate, works to achieve price stability, maintains that its goal for inflation is 2 percent. So the goal is missed this month, and in no month for over four years has it been satisfied.
Sky-is-falling economists can, at any time and without fail, bring out bits of economic data here and there to help amplify their doom-saying concerns; but there may be enough in some of the major economic data now to reasonably concern a prudent person. At the same time, there are some positives that can be assembled from certain data to aid optimistic narratives.
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