UCF Economist: No, We’re Not Entering Another Recession
Read Sean Snaith’s latest quarterly U.S. economic forecast here.
ORLANDO, June 13, 2025 — In his latest U.S. economic forecast, Sean Snaith miffs at the increasing difficulty of economic forecasting during the fluctuating tariffs of the Trump administration.
But Snaith, the director of the University of Central Florida’s Institute for Economic Forecasting, says he’s willing to make at least one bold prediction in his report released this morning:
“The tariff and trade uncertainty will not result in the U.S. economy entering a recession. It may, however, cause growth to be somewhat lower than it would have been in the absence of the disorder.”
Instead, Snaith saves his concern for a growing national debt that continues to rise, surpassing $36.9 trillion.
“It took decades to accumulate this debt, and the problem cannot be fixed until Congress acts,” Snaith says. “Unfortunately, I’m not yet convinced that Congress will undertake the required cuts to the deficit, and the ‘Big Beautiful Bill’ currently being voted on suggests further delay in addressing this issue.”
If higher interest rates return to the economy, the burden of servicing the national debt will continue to rise as well, Snaith adds. And slower-than-projected economic growth (or a future recession) would also push projected deficits even higher.
Additional highlights from Snaith’s four-year U.S. economic forecast are:
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The labor market is cooling, but still solid. Payroll job growth of 2.2% in 2023 fell to 1.3% in 2024 and will continue to slow. It is expected to hit 1.1% in 2025, 0.3% in 2026, 0.2% in 2027, and then tick up to 0.3% in 2028.
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Despite resistance to the effects of the Federal Reserve’s tightening, the headline unemployment rate (U-3) is expected to gradually rise to 4.9% in 2027 before declining slightly in 2028. These are still historically low rates of unemployment.
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Core consumer price inflation will continue its slow decline. By the beginning of 2027, headline inflation will be close to the Fed’s target level of 2%. The Fed prematurely started to cut interest rates in 2024 and has had to pause rate cuts thus far in 2025.
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After two years of erosion, consumers’ purchasing power has been clawing its way back. Wage growth has surpassed inflation and is allowing households to begin repairing strained budgets and to address more than $1 trillion in credit card debt.
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Real GDP growth hit 2.9% in 2023 and 2.8% for 2024. Growth will slow over the next several years to 1.5% in 2025, 1.7% in 2027, and stay near that level through 2028.
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High home prices combined with 7% mortgage rates have eroded housing demand. However, low inventories will provide a floor for the sector. Housing starts declined from 1.6 million in 2022 to 1.42 million in 2023 and will continue to ease, reaching 1.33 million in 2027. However, as mortgage rates decline, starts will creep up, reaching 1.34 million in 2028.
