() President Donald Trump’s tariffs have set off a wave of economic uncertainty, driving stocks lower and fueling fears of a potential recession.

Trump didn’t rule out the possibility of a recession in a recent Fox News interview with Maria Bartiromo.

When asked if he was expecting a recession this year, Trump told Bartiromo: “I hate to predict things like that. There is a period of transition because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing.”

Trump added: “It takes a little time. It takes a little time. But I think it should be great for us.”

Last week, Treasury Secretary Scott Bessent told CNBC that there’s going to be a “detox period” for the U.S. economy as it moves away from public spending to private spending.

While the president and administration officials urge patience, investors are feeling uneasy, and some banks have raised their recession odds in recent days.

How likely is a recession?

Recession risks have ticked up recently, but that doesn’t mean a downturn is imminent.

Last week, Goldman Sachs hiked its odds of a recession in the next 12 months from 15% to 20%, The Wall Street Journal reported.

The bank reportedly noted its forecast could increase further if the Trump administration remains “committed to its policies even in the face of much worse data.”

Economists at J.P. Morgan Chase are more pessimistic and peg the chances of a recession this year at 40%, “owing to extreme US policies,” according to Bloomberg.

A recent forecast from the Federal Reserve Bank of Atlanta also set off alarm bells, estimating that first-quarter GDP may decline by an annualized adjusted rate of 2.4%, which would be the first quarterly contraction in the U.S. since 2022.

A separate projection from the New York Federal Reserve is more optimistic, forecasting robust 2.7% growth in the first quarter.

Which is all to say: Predicting a recession is difficult, and experts disagree about how likely it is to happen.

Back in March 2023, Goldman Sachs saw a 35% chance of a U.S. recession in the year ahead, but that didn’t end up happening.

As a general rule of thumb, two consecutive quarters of negative real GDP growth is often considered a recession, but that’s not the official definition.

The National Bureau of Economic Research (NBER) defines “recession” as a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

While the U.S. may not be in a recession today, there are four economic indicators that suggest the U.S. economy may be slowing.

1 – Job market softening but resilient

U.S. employers added 151,000 jobs in February, a sign the job market is slowing but still holding up for now.

Employment rose in health care and finance as well as transportation and warehousing, according to the latest Labor Department data. The unemployment rate ticked up slightly to 4.1%, up from 4.0% in January but still historically low.

“It’s hard to look at the jobs data and believe that GDP is contracting in Q1,” Harvard Economist Jason Furman wrote on X. “But then again, crazier things have happened.”

Lydia Boussour, senior economist at the tax and consulting firm EY, called February’s job growth “healthy” but said “downside risks are brewing.”

“Steep tariff increases and the surge in uncertainty and volatility could cause job growth to moderate even further,” Boussour wrote in a commentary.

Other data has offered more reason for concern.

A recent report from outplacement firm Challenger, Gray and Christmas found U.S.-based employers cut more jobs last month than in any February since 2009.

Part of that was driven by government job cuts resulting from Trump’s Department of Government Efficiency (DOGE) efforts.

“With the impact of the Department of Government Efficiency [DOGE] actions, as well as canceled Government contracts, fear of trade wars, and bankruptcies, job cuts soared in February,” Andrew Challenger, senior vice president and workplace expert for Challenger, Gray & Christmas, said in the report.

The number of Americans filing for jobless benefits has also risen, climbing to 242,000 for the week ending Feb. 22, the highest level since early December.

However, “that number is still historically low,” according to Rob Haworth, senior investment strategy director with U.S. Bank Asset Management.

2 – Stocks have pulled back

The S&P 500 is down more than 7% over the past month, wiping out all of its gains since Trump was reelected in November.

Share prices for popular stocks like Tesla (-36%), Nvidia (-25%) and Meta (-16%) have sunk even faster from a month ago.

Uncertainty around Trump’s tariffs and the potential hit to both consumers and businesses appear to be the main reason investors are spooked.

“This is the first time we’ve had an administration pretty much say with a straight face … the objectives are going to cause pain,” Shelby McFaddin, investment analyst at Motley Fool Asset Management, told The Wall Street Journal.

Major retailers like Target and Best Buy have already warned shoppers that the president’s tariffs will likely lead to higher prices.

Trump’s tariff flip-flop in recent days has only added to the chaos and made it harder for Wall Street investors to price-in the potential impact.

“There are always multiple forces at work in the market, but right now, almost all of them are taking a back seat to tariffs,” according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

Though it has fallen over the past month, the S&P 500 is up roughly 10% from a year ago.

3 – Americans are spending less

Consumer spending is the backbone of the U.S. economy, and recent data suggests Americans may be starting to pull back.

Americans cut their spending by 0.2% in January from the month prior the first decline since March 2023 and the biggest decrease in nearly four years. The drop was partially attributed to unseasonably cold weather, so it could be an anomaly rather than a trend.

Still, the retreat was unexpected and occurred even as incomes rose. If Trump’s tariffs worsen inflation, as many economists expect them to, Americans may cut back further.

That would be a major problem for the economy given that consumer spending accounts for roughly two-thirds of U.S. economic activity.

“We have to wait and see how new tariffs ultimately affect the data to see if consumer spending could be altered,” Haworth said in his analysis.

Two separate measures of consumer resilience have flashed warning signs recently. The Conference Board’s Consumer Confidence Index fell sharply in February, recording the biggest monthly decline since August 2021.

The index that measures consumers’ short-term outlook slipped below the threshold “that usually signals a recession ahead,” the Conference Board noted.

The University of Michigan’s index of consumer sentiment also dropped last month, in large part “due to fears that tariff-induced price increases are imminent,” survey director Joanne Hsu said.

4 – Credit card debt, late car payments on the rise

Americans collectively owe more than $1.21 trillion on their credit cards, a record high that suggests much of the recent consumer spending strength has been fueled by borrowing.

Now, more Americans are falling behind on their loans. Credit card delinquencies ticked up at the end of 2024, but late payments on auto loans rose even faster, according to the Federal Reserve Bank of New York.

In the fourth quarter of 2024, the share of auto loans among all borrowers that transitioned into serious delinquency 90 days or more past due rose to 3%, the highest level since 2010.

“Higher car prices combined with higher interest rates have driven monthly payments upward and have put pressure on consumers across the income and credit score spectrum,” researchers at the New York Fed wrote.

Separate data from Fitch Ratings shows subprime auto borrowers are feeling the most pain. Some 6.56% of subprime auto borrowers were at least 60 days past due on their loans in January, the most since the agency began collecting the data in 1994.

Another sign Americans may be feeling financially strained? More people are raiding their retirement savings to cover emergency expenses. Hardship withdrawals from 401(k)s hit a record high in 2024, according to Vanguard Group.

The Associated Press contributed to this report.