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. Consumer sentiment fell slightly in October, with decreases among middle-age and older consumers. While confidence remains above the lows seen in April and May, inflation and high prices remain top of mind for consumers, per the University of Michigan.
• Declining sentiment: Consumer sentiment fell slightly in September, with the decline evident across age, income, and education groups. While confidence remains above the lows seen in April and May, the broad-based drop reflects consumers’ concerns about inflation, a weak job market, and mounting financial pressures, per the University of Michigan.
• Bifurcated spending: The gap between low- and high-income consumers is widening. In September, spending among low-income households rose just 0.6%, while higher-income households increased spending by 2.6%, 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: US factory activity shrank in October for an eighth straight month, 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 S&P 500 is up 15.1% year to date; unemployment remains low by historical standards; and GDP grew 3.8% YoY in Q2—the fastest pace in nearly two years—with the Atlanta Fed’s GDPNow projecting another 4.0% gain in Q4 as of November 6, though that estimate is missing key data from the Bureau of Labor Statistics that aren’t being published during the federal shutdown.

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.