The US economy sits at a critical juncture as warnings of a recession or even stagflation emerge—while other data suggest an economy that continues to hum along.

Our analysis of recent economic data reveals a clear pattern of a weakening economy:

• Labor market strain: Job creation has slowed to a crawl, with nearly half of all net gains over the past year concentrated in just two sectors—healthcare and “social assistance” (a category mainly consisting of personal and home health aides), per the Bureau of Labor Statistics. Unemployment is rising—especially among Black workers—and job openings recently fell to a 10-month low.
• Declining sentiment: Consumer confidence in August fell to its lowest since May and remains well below historic norms as households feel the squeeze of inflation, a sluggish job market, and mounting risks to their pocketbooks, per the University of Michigan.
• Bifurcated spending: The gap between low- and high-income consumers is widening. In August, spending among low-income households rose just 0.3%, while higher-income households increased spending by 2.2%, per the Bank of America Institute. That divide is reshaping the economy: the top 10% of earners—those making at least $250,000—now account for nearly half of all spending (49.2%), up from 45.7% a decade ago, Moody’s Analytics reports.
• Manufacturing slump: The sector has been in recession for six straight months, per the Institute for Supply Management. Manufacturers cite deep uncertainty from shifting tariff policies as a major drag on business.

Even so, a US recession is far from certain. The stock market is up 12.5% year to date; unemployment remains low by historical standards; and GDP grew 3.3% YoY in Q2, with the Atlanta Fed’s GDPNow projecting another 3.3% gain in Q3 as of September 17. While those gains are unevenly distributed, it’s unclear whether the pressures facing low- and middle-income consumers will be enough to drag down the broader economy.

This live FAQ will be continually updated to help clients track the key signals of an economic slowdown, recession, or even stagflation. We’ll take a closer look at how industries are positioning themselves to weather a potential downturn—and what strategies are emerging to build resilience amid mounting headwinds.