The UCLA economists are on a recession clock. The Trump administration’s economic policy will slow down the manufacturing sector and reduce the workforce.
An analysis by UCLA Anderson forecast said there are no signs of a recession yet, but there could be a recession as a result of multiple events that will occur simultaneously in the next year or two.
“It is said that the administration is said to impose a major contraction on various sectors of the economy in its own way,” read the report. “Widths are beginning to emerge in household spending patterns, and the financial sector is ready to amplify the recession in the areas of asset valuation and newly introduced risk.”
The report pointed to three specific proposed policies of concern: tariff policies that could trigger a trade war, tariffs that could clash with the manufacturing sector, and the Department of Government Efficiency (DOGE) efforts could reduce the federal workforce, reduce immigration policies that could lead to massive deportation, and harm the construction sector.
The report also said uncertainty and the constantly changing threat of tariffs pose additional risks to the economy by causing inflation.
The forecast also pointed to the National Debt and Budget Settlement Bill that Republicans are pushing in the House.
“As hoping to circumvent us into a healthy fiscal foothold, the House of Representatives’ current budget adjustment bill calls for additional tax cuts without a reasonable cut in spending, which only exacerbates the US debt trajectory,” the analysis said.
However, UCLA economists said the recession is “completely avoidable.”
“If the above policies are removed more slowly or gradually phased out, they are unlikely to be triggered,” the report said.
From the postwar recession in 1873 until today, a recession occurred when multiple economic sectors contracted simultaneously.
City News Service contributed to this report.
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