Are We in a Recession—or Just Vibing Through Economic Confusion?
Look, the National Bureau of Economic Research (NBER) is the only folks who get to officially call a recession. And right now? They're staying quiet. But the vibes are... interesting.
The Job Market is Giving Mixed Signals
Here's what's weird: 25 states are watching unemployment creep up. We haven't seen this pattern since 2020 (pandemic, duh) and before that, 2009 (financial crisis, yikes).
The national unemployment rate? It's gone from 3.4% to 4.3% in just two years. And here's the kicker—since the 1960s, every time unemployment has jumped nearly a full point like this, the NBER eventually came out and said "yeah, that was a recession."
But they haven't said anything yet.
The Whole World is Feeling It
This isn't just a U.S. thing:
Canada's at 7.1% unemployment
Germany's sitting at 6.3%
UK's at 4.7%
Meanwhile, other warning lights are flashing:
Consumer confidence in the U.S. is at levels we usually only see when everything's on fire
Stocks got hammered in early 2025—we're talking a 35% drop for the average stock (even though it bounced back fast)
Some economists are basically like "this IS a recession, NBER just hasn't admitted it yet." And honestly? They might have a point. Historically, there's an 8-month lag between when a recession actually starts and when NBER makes it official.
But Wait—The Economy Still Looks... Fine?
Here's where it gets confusing. NBER doesn't just look at unemployment. They track four big things:
Industrial Production – Flat since 2022, but not dying
Real Personal Income – Still growing steadily
Manufacturing & Trade Sales – Actually ticking up recently
GDP Growth – Holding at 2-3%, never gone negative
Three out of four of these metrics are near all-time highs. That's not exactly "recession vibes."
The Unemployment Thing Gets Weirder
Yeah, 25 states have rising unemployment. But the percentage of states with rising jobless rates? That's actually falling.
This is the opposite of what happens before recessions. In fact, this pattern—where the percentage peaks and then rolls over—usually signals the end of downturns, not the beginning. We saw this exact thing after the 1991, 2002, 2009, and 2020 recessions.
The stock market seems to believe this too. The rally since late 2024 has been the strongest since 2020, which kicked off years of gains.
Wall Street Isn’t Warning You, But This Chart Might
Vanguard just projected public markets may return only 5% annually over the next decade. In a 2024 report, Goldman Sachs forecasted the S&P 500 may return just 3% annually for the same time frame—stats that put current valuations in the 7th percentile of history.
Translation? The gains we’ve seen over the past few years might not continue for quite a while.
Meanwhile, another asset class—almost entirely uncorrelated to the S&P 500 historically—has overall outpaced it for decades (1995-2024), according to Masterworks data.
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And they’re not just buying. They’re exiting—with net annualized returns like 17.6%, 17.8%, and 21.5% among their 23 sales.*
Wall Street won’t talk about this. But the wealthy already are. Shares in new offerings can sell quickly but…
*Past performance is not indicative of future returns. Important Reg A disclosures: masterworks.com/cd.
But This Recovery Hits Different
Normal recessions come with:
Earnings collapses
Mass layoffs
Fed aggressively slashing rates
Total panic
That panic creates the setup for long bull markets.
This time though:
Unemployment is rising slowly, not cratering
The Fed is lowering rates gradually, not panic-cutting
Inflation is still above their target, which means they could pause cuts—or even raise rates again if jobs stabilize
So calling this the start of a multi-year bull run? Risky.
The Bottom Line
The U.S. economy is stuck in limbo:
✅ Unemployment is rising (bad vibes)
❌ But not spiraling (good vibes?)
✅ Confidence and markets got shaky (bad vibes)
❌ But growth and income are strong (good vibes?)
We could be in a "stealth recession" that NBER will eventually confirm. Or we could be at the start of a solid recovery.
The Fed is the main character here. As long as they keep easing rates, markets could keep climbing. But if they pivot? Buckle up.
TL;DR: Nobody knows if we're in a recession, might be in one, or just dodged one. Watch the Fed. 👀