
Forbes Recession Tracker: Clinton's Treasury Chief Expects 2 Million More Unemployed Americans In ‘Likely' Downturn
Economists at the U.S.' largest banks, and a former top-ranking White House official, warn the U.S. will likely tip into a recession as President Donald Trump's tariffs go into effect, reflecting the bloodbath on Wall Street over the last five days in response to the economic policies which threaten to bring higher inflation and far weaker economic growth.
Lawrence "Larry" Summers, the Treasury Secretary under President Bill Clinton, speaks at the Aspen ... More Institute in 2015.
Lawrence Summers, the former Treasury Secretary during President Bill Clinton's term, told Bloomberg on Tuesday it's 'more likely than not' the tariffs will send the U.S. into a recession, adding to a growing chorus of economists sounding that warning.
Summers predicted such a downturn would leave an additional 2 million Americans unemployed, a more than 28% increase from the 7.1 million unemployed Americans in March, and a $5,000 or greater decline in annual household income.
Goldman Sachs economists hiked their odds of a recession over the next year to 45% in a downbeat note to clients Sunday, far higher than the 20% probability they held in late March and cautioning that without any capitulation from Trump, their baseline economic forecast is for a recession.
Economists at JPMorgan, the U.S.' largest bank by assets and market capitalization, issued an even starker 60% recession odds in a scathing Friday note, labeling Trump's policies as the 'largest tax increase' since 1968 which will 'fall heavily on the US consumer.'
'The fact that everything is sort of happening under the [International Emergency Economic Powers Act] and there's sort of no process is adding to the uncertainty,' Arend Kapteyn, UBS Investment Bank's chief economist, told reporters Monday, adding numerous economic surveys are 'already effectively at recessionary levels,' surpassing those seen during the height of the Great Recession.
The UCLA Anderson School of Management published last month an official 'Recession Watch' for the first time in its 73 years of economic forecasts, as economist Clement Bohr issued a scathing assessment of Trump's economic policies, writing the Recession Watch 'serves as a warning to the current administration: Be careful what you wish for because, if all your wishes come true, you could very well be the author of a deep recession.' A recession is 'entirely avoidable' if Trump's signature economic policies, including the most severe tariffs in nearly a century and the public sector's dismantling at the hands of Elon Musk's Department of Government Efficiency (DOGE), are 'pared back or phased in more gradually,' according to Bohr.
Stock prices don't completely correlate with economic growth, but equity investors are clearly pricing in significantly increased odds of a down stretch for the U.S. economy. The S&P 500 dove into a 20% bear market earlier Monday, wiping out about $10 trillion in market value, led by stocks considered the most vulnerable to a slowdown, including artificial intelligence darling Nvidia and Elon Musk's Tesla. But markets are still pricing 'nowhere close to the worst case' scenario, Bhanu Baweja, UBS Investment Bank's chief strategist, said Monday.
Ahead of the 'Liberation Day' announcement last week, Trump braced Americans for a possible recession. In a Fox News interview aired March 9, he would not rule out the possibility of a recession, cautioning Americans for a period of economic 'transition' as his policies take hold and noting he's paying little attention to stock market losses. In subsequent media appearances, Treasury Secretary Scott Bessent similarly declined to dismiss a potential recession and said the U.S. will go through a 'detox period.' Bessent told NBC's 'Meet the Press' in an interview he believes it 'would have been much healthier if someone had put the brakes' on ahead of the Great Recession. 'Be Strong, Courageous, and Patient, and GREATNESS will be the result!,' Trump wrote on his Truth Social platform Monday.
The technical definition of a recession is two consecutive quarters of negative growth in gross domestic product, a comprehensive measure of all goods and services produced in a country. The official quarterly GDP stats haven't turned negative yet, but the Atlanta Federal Reserve's real-time model ignited concerns by calling for -1.8% annual GDP growth in 2025's first quarter, which would be the worst reading since 2020—though the estimate is likely skewed by its methodology, including how it accounts for a surge in gold imports.
Elsewhere in financial markets, a flight to government-issued debt is evidence of a thirst for safer returns in the face of a potential recession, as yields for benchmark 10-year Treasury bonds have dropped by more than 30 basis points over the past two months (lower yields mean bonds got more valuable). But the most common bond market signal of a recession, the inversion of the yield curve, in which longer-term bonds have lower yields than shorter-dated ones, has actually normalized in recent months. The New York Fed's bond-linked recession model calls for just 30% recession odds over the next year, down from the more than 70% odds in late 2023, a period which failed to materialize into a full-blown recession.
Perhaps the most concerning signal over the last is a breakdown in everyday Americans' conviction in the economy, as the Conference Baord's closely watched consumer confidence survey tumbled this month to its lowest level since 2021. That tracks with weaker spending, as February retail sales grew by just 0.2% from January to February, according to a report released March 17 by the Census Bureau, far worse than the 0.6% month-over-month increase projected by economists.
One of the most important hallmarks of the American economy, the labor market has shown some cracks in early 2025 as job creation slowed and layoffs spiked, but remains overwhelmingly strong, as March's 4.2% unemployment rate sits well within the healthy historic norm. A key labor market recession indicator, the Sahm rule, flashes a far lower likelihood of a recession than it did when it peaked last summer, inspiring a short-lived market selloff in August.
Trading in two of the world's most precious commodities certainly point to the prospect of a global recession. Gold prices are up more than 10% this year to a record $3,000 per troy ounce as investors flood into the historic safe haven asset, while prices for international benchmark Brent Crude sank this month to their lowest point since 2021 as traders braced for a potential global weakening in oil demand as economic activity slows.
Bessent and Trump have made clear they are lasered in on lowering interest rates, which are determined by the politically independent Fed. Typically, rates are only drastically cut during periods of economic distress, as lower rates typically stimulate economic growth as households and businesses are more likely to borrow with lower interest costs, though that uptick in loan activity can simultaneously lead to higher inflation as demand rises. The Fed is likely to hold off on further rate cuts 'until tariff policy becomes clearer,' according to David Mericle, Goldman's chief U.S. economist.
Bank of America's monthly survey of global fund managers released this month revealed some 63% of these influential investors expect the global economy to weaken over the next year, making March the second biggest jump in macroeconomic pessimism since the poll's 1994 inception. The survey also revealed fund managers fled to cash this month at the highest rate since March 2020 and moved away from U.S. stocks at their fastest pace on record, signaling an unraveling of faith in stateside equities. The fund managers heavily agree White House policy is the single biggest risk, with 55% of respondents citing a tariff-driven trade war sending the global economy into a recession as the top threat and 13% naming actions from Elon Musk's Department of Government Efficiency sending the U.S. into a recession as the biggest risk. The Bank of America survey was conducted March 7-13 among 205 global fund managers who collectively manage $477 billion in assets.
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CBS News
14 minutes ago
- CBS News
Trump and Hegseth to visit Fort Bragg as they send troops to Los Angeles
Washington — President Trump and Defense Secretary Pete Hegseth are visiting Fort Bragg, the nation's largest military installation, on Tuesday, after sending the National Guard and U.S. Marines to respond to protests in Los Angeles. Members of the Marine Corps arrived in the greater Los Angeles area Tuesday, a defense official told CBS News, after the military activated about 700 active-duty Marines Monday. The Pentagon said the Marines would "seamlessly integrate" with National Guard troops to protect "federal personnel and federal property." There are 2,100 members of the California National Guard now on location in the greater Los Angeles area, operating in Los Angeles, Paramount and Compton. The president is expected to speak at Fort Bragg in North Carolina around 4 p.m. Hegseth is heading to the military base after testifying on Capitol Hill. "Will be going to Fort Bragg today. Big speech, amazing crowd! See you later!!!" Mr. Trump wrote on Truth Social Tuesday morning. The president claimed Tuesday morning that Los Angeles would be "would be burning to the ground right now," if not for his actions to federalize the National Guard. A memorandum the president signed Saturday said the troops are authorized to protect Immigration and Customs Enforcement officials and other federal law enforcement officials. He invoked Title 10, the U.S. code governing use of the armed forces, allowing the National Guard to come into LA in a supporting role. On Monday, California Gov. Gavin Newsom sued the president and Hegseth over the decision to deploy the National Guard to the state against Newsom's wishes. Newsom argued that Title 10 "has been invoked on its own only once before and for highly unusual circumstances not presented here." He pointed to the text of the U.S. code, which states that when the president calls a state's National Guard into federal service under Title 10, "those orders 'shall be issued through the governors of the States.'" Hegseth, Newsom maintained, "unlawfully bypassed the Governor of California, issuing an order that by statute must go through him." "At no point in the past three days has there been a rebellion or an insurrection," the lawsuit reads. "Nor have these protests risen to the level of protests or riots that Los Angeles and other major cities have seen at points in the past, including in recent years."
Yahoo
14 minutes ago
- Yahoo
CartCon 2025: Tariffs, turbulence and the future of resilient retail
At second-annual CartCon conference in Napa Valley, CA, the tone was electric with anticipation but also laced with urgency. Billed as a summit for the company's expansive ecosystem of brands, vendors and strategists, the event served as both a product showcase and a pressure valve. Nowhere was that tension more visible than during one of the conference's hardest-hitting panels, a deep dive into the complexities of tariff policy and its ripple effects on global sourcing, consumer pricing and retail resilience. The panel consisted of three voices with rare insight into the collision of policy and commerce: Chris Smith, president of Summit Global Strategies; Tim Manning, former White House supply chain coordinator under President Joe Biden; and Nick Stachel, logistics strategy adviser at Izba Consulting. What followed was not a high-level overview, but a granular exploration of the legal, political and operational forces shaping how, and where, products are made, moved and sold. From globalization to geo-economics Smith opened the discussion by tracing the historical arc of U.S. trade policy. For decades following World War II, American trade strategy revolved around multilateralism. The U.S. saw global trade not just as an economic imperative but as a geopolitical tool, creating allies, raising standards of living and preventing conflict. But in 2016, that long-standing consensus fractured. The bipartisan abandonment of the Trans-Pacific Partnership signaled a sharp pivot. As Smith explained, the political center collapsed under the weight of the 'China Shock,' a term describing the decimation of American manufacturing towns due to offshoring. Smith described President Donald Trump's tariff policy as a psychological reset. Before Trump, U.S. tariffs averaged around 2%. Within months, they jumped to 18% in key categories. This wasn't just an economic strategy, it was anchoring. 'It's like burger sizes,' Smith said, relating back to Wendy's psychological marketing strategies. 'Before Trump, we had singles and doubles. Now the triple is on the menu, and everything else looks small by comparison.' Tariffs, he added, have become Trump's 'cat toy' — a provocative distraction wielded without consistent strategy. Even if future administrations soften tariff policy, Smith warned, the structure of global trade has already shifted. Retailers and manufacturers alike are building permanent workarounds. Inflation, particularly in consumer goods, is the slow-burning consequence. While Smith provided the philosophical backdrop, Manning broke down the legal tools underpinning today's tariff landscape. The real disruption, Manning emphasized, has come through the use, and misuse, of the International Emergency Economic Powers Act (IEEPA). Originally designed as a tool for national security sanctions, IEEPA has been repurposed by the Trump administration to enact sweeping tariffs with little congressional oversight. Manning described the legal and logistical chaos for businesses from these tactics. In just six weeks, the Trump administration issued 17 executive orders using IEEPA authority, stripping trade policy of its usual predictability and process. For businesses, this has been catastrophic. Sourcing strategies built over years have unraveled in days. 'We're in a volatile environment,' Manning said. The cost of doing business now includes factoring in the potential for abrupt, unexplained swings in tariff exposure. Long-term investments have become high-risk bets, and in many cases, they're simply not being made. On-the-ground retail strategy Bringing the policy talk down to the warehouse floor, Stachel outlined how brands are actually coping with this new reality. In the short term, some are fast-tracking inventory from China before new tariffs hit, relying on expedited ocean freight and cross-docking at West Coast ports to minimize delays and avoid customs bottlenecks. Others are making subtler moves — like holding prices steady on high-visibility products – say, a gaming console – while raising prices on accessories and add-ons to recoup margin. Stachel noted that many brands have moved beyond the now-familiar 'China Plus One' strategy, opting instead for a 'China Plus Three' approach. They are spreading risk across Vietnam, India and Mexico, often working with global manufacturing giants like Foxconn that can seamlessly shift production across borders without retooling or retraining labor. In essence, brands are outsourcing flexibility itself. For those planning beyond the current election cycle, geographic diversification is no longer enough. Brands are factoring in port access, transportation infrastructure, exposure to natural disasters and local workforce stability. Some are eyeing countries like Morocco, Colombia and Thailand as next-generation sourcing hubs. Nearshoring to Mexico has particular appeal, not just because of its proximity to U.S. consumers, but because of the downstream economic benefits. 'We're still benefiting from a cross border perspective, from a transportation trucking perspective, from a warehousing perspective, as these border towns are growing, the economies in the small border towns are growing as well,' said Stachel. These sourcing shifts are backed by hard data prepared by Stachel. According to a comparative analysis of emerging manufacturing markets, countries like Vietnam, Indonesia and the Philippines are increasingly viable alternatives to China, not only in terms of labor costs but also port infrastructure and U.S.-bound vessel frequency. Vietnam, for instance, operates nearly 50 seaports, including Ho Chi Minh City and Hai Phong, both of which have multiple sailings to the U.S. each week. Indonesia boasts over 100 ports, including Tanjung Priok in Jakarta. Even Cambodia, though limited in scale, has weekly direct sailings from both Phnom Penh and Sihanoukville. These figures underscore the importance of transportation fluidity and market access in sourcing decisions. As Stachel emphasized, brands are no longer optimizing solely for cost, they're optimizing for resilience. Both Smith and Manning cautioned that the real reckoning may be ahead. While tariff impacts are already being priced in at the retail level, the broader inflationary wave has yet to crest. Smith called inflation the 'other shoe,' likely to drop later this summer as new tariffs pass through the supply chain and collide with already fragile consumer sentiment. Uncertainty, they agreed, has become the greatest tax of all. With businesses unable to predict future policy, many are frozen. Manning advised attendees to monitor key macroeconomic signals, including treasury bond activity, consumer confidence indices and safety stock drawdowns. Executive orders posted on he added, are the best early indicators of a sudden policy shift. What retailers are saying – and doing The audience at CartCon also offered candid perspectives. Through real-time polling, attendees offered a rare window into how brands are navigating the chaos. Asked what recent policy had most affected their supply chains, 68% cited China tariffs, with an additional 24% naming de minimis enforcement, or stricter checks on duty-free, low-value imports. In a sign of just how volatile the environment has become, 64% said they revisit their sourcing strategies quarterly. And nearly half, 47%, have responded by raising prices. Twenty-nine percent have changed sourcing countries, while 18% are simply eating the cost. Looking ahead, most brands aren't betting on reshoring. Asked if they expect to source more from the U.S. in five years, 70% said their sourcing would remain about the same, and 30% expected an increase. No one expected to source less. It was a striking rebuke of the idea that domestic manufacturing is due for a renaissance, at least for the retail segment. Tariffs and uncertainty are already impacting consumer demand. Thirty percent of respondents said they expect a consumer slowdown by Q4 2025, while 45% said they're already feeling one. And yet, the vast majority, 82%, said they are not cutting marketing budgets in response. In today's environment, visibility is survival. In a forward-looking poll, 81% of respondents said online shopping will be the dominant channel in the next decade, compared to just 6% for stores. Even more striking, 75% believe direct-to-consumer models can still succeed, suggesting that agility, not abandonment, is the key to survival. The post CartCon 2025: Tariffs, turbulence and the future of resilient retail appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data


Boston Globe
14 minutes ago
- Boston Globe
‘It's a net positive for us.' For some US manufacturers, Trump tariffs pay off
AccuRounds is exactly the kind of high-end manufacturing company that's supposed to benefit from the Trump tariffs —and right now the plan seems to be working. After a sluggish 2024, AccuRounds workers are putting in overtime as they transform steel rods into hundreds of highly specialized industrial gadgets, and the company is looking to hire. Revenues were up by 20 percent in the first quarter of 2025 and Tamasi expects the same for the current quarter. Revenues last year came to about $20 million, he said. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up AccuRounds makes precisely machined pieces of metal that mostly go inside bigger machines, ranging from commercial aircraft to industrial robots to drug manufacturing systems. For instance, one component goes into a pump that excretes the glue used to assemble iPhones. Another is a driveshaft that's found in most of the machines used worldwide to make influenza vaccines. Advertisement AccuRounds also makes surgical tools such as trephenes, the razor-sharp cookie cutters used to extract diseased corneas from human eyes during transplant procedures. AccuRounds even makes components for high-end flutes played by professional musicians. Advertisement AccuRounds is nothing like the grimy machine shops of old. It's clean and well-lit, with a multitude of computer-guided milling machines, each costing hundreds of thousands of dollars. The Plexiglass windows on each machine are splashed by a constant spray of cutting oil, which cools and lubricates the cutting tools and washes away metal debris. Twelve-foot steel rods are fed into the mill, where they're automatically shaped, drilled and cut into the proper shape, then dropped into a finished-parts bin. Lately the company's installed robotic arms at some of the milling machines. Made by Universal Robots, a Danish company owned by North Reading-based That doesn't mean fewer jobs, Tamasi said, just different ones. 'It's a commitment that we've made to our team here, that technology, The company's recent revenue surge began right after the re-election of Donald Trump, who'd campaigned on a promise to revive US manufacturing by levying high tariffs on imports. 'It was the end of November, early December,' said Tamasi. 'That's when we started to see things turn.' One customer who had been purchasing from machine shops in Singapore and China told Tamasi that the impending tariffs had cause a change of heart. 'They mentioned they spent a couple of years farming work out,' Tamasi said. 'Now they're looking at bringing that work back.' Advertisement Mark Curtin inspected a finished product at AccuRounds. Matthew J. Lee/Globe Staff It's a reminder that tariffs aren't all bad. And AccuRounds isn't the only local manufacturer to benefit. Canton-based Company president Brian Buyea said that even before Trump took office, he was hearing from customers looking to 'reshore' their supply chain with US-made circuit boards. 'Now you start to add the tariffs on top of that, it's started to give us a little more of a positive boost,' Buyea said. Because the Trump administration has so frequently raised and lowered its proposed tariff rates, Buyea couldn't predict their effect on Remtec's revenues. 'It could be anything from a 10 percent pickup for us, to, we could double our business,' he said. Even skeptics concede that import taxes can benefit domestic manufacturers by driving up the cost of products made by foreign competitors. 'These types of polices inevitably have some winners, at least in the short term,' said Scott Lincicome, economist at the To Lincicome. tariffs produce far more losers than winners, as businesses and consumers throughout the economy end up paying more for products. Either they keep buying imports, and pay the tariff, or they switch to more expensive US sources. Many domestic companies use higher tariffs as an opportunity to raise their own prices. And as domestic orders surge, some companies must invest in new plant and equipment, and their new customers will pay for it. 'Over time, you're getting slower growth and a less efficient, less productive economy,' said Lincicome. Advertisement AccuRounds derives only about 5 percent of its revenue from exports, so the company won't suffer much if foreign nations aim retaliatory tariffs at US goods. But the Trump tariffs make it more expensive for manufacturers to purchase the supplies and equipment they need. Steel tariffs are a problem, Tamasi admitted. He'd happily buy US-made steel but 'the quality and the consistency is not there,' he said. 'We've tried everyone.' So he'll keep importing the steel despite the administration's 50 percent tariff. However, AccuRounds' sales contracts stipulate that the company can pass on any increases in steel costs to the end user, shielding AccuRounds from the tariff burden. There's no way around it, said Tamasi. 'If we had to absorb all price increases,' he said, 'we wouldn't be able to compete.' An even bigger hit could come from purchasing new milling machines, priced at half a million dollars or more even before the tariffs. The only ones worth buying, Tamasi said, are made in Switzerland, Germany and Japan. No US company makes the machines he needs, Tamasi said there's no way he can pass this tariff bill directly to customers, but in the long run it could well push his prices higher. Still, if Tamasi's customers are willing to pick up the tab, AccuRounds is a likely victor of the tariff wars. AccuRounds makes specialized metal parts. Matthew J. Lee/Globe Staff Hiawatha Bray can be reached at