COLUMBUS, Wis., March 26, 2025 (GLOBE NEWSWIRE) -- The latest data from the Conference Board reveals alarming signs that the U.S. economy is already in a recession. According to their report released Tuesday, the Consumer Confidence Index fell 7.2 points in March to 92.9, well below analysts' expectations of 94.5. More troubling is the sharp drop in Americans’ short-term economic outlook, which fell 9.6 points to 65.2—its lowest reading in 12 years. A level below 80, the threshold noted by the Conference Board, often signals the onset of a recession.
"Once all the data revisions for 2024 are finalized, we will likely discover that the U.S. has been in a recession for the past 10 to 12 months," said Michael Eisenga, CEO of First American Properties. "The downward revision in key economic indicators, along with rising unemployment expectations and a dramatic pullback in CEO confidence, clearly point to a contracting economy."
A recent University of Michigan survey indicates that 66% of respondents foresee rising unemployment in 2025, a number that has never been above 60% without signaling a recession. This aligns with the ongoing trend of job cuts and layoffs that have accelerated across multiple sectors.
While service spending has remained relatively strong, this too is beginning to falter as Americans pull back on discretionary expenditures. Notably, consumer behavior is shifting, with less spending on dining out, vacations, and other non-essential goods. Even industries traditionally seen as more resilient, such as value orientated retail, are feeling the pressure. The CEO of Dollar Tree has reported that even basic consumer staples are seeing reduced demand, signaling that financial strain is reaching across all income brackets.
Additionally, traffic to key consumer destinations like Las Vegas has fallen by 1.1% year-over-year, signaling declining discretionary spending. Financing is becoming increasingly difficult to secure, and as access to capital for business tightens, cost-cutting measures, including layoffs, are expected to escalate.
The commercial real estate (C.R.E.) market is experiencing mounting challenges, with loans becoming negatively leveraged due to a reduction in property values amid prolonged high interest rates, expenses, and vacancies. The residential mortgage market is also feeling strain, as higher interest rates and downward price pressures make financing more difficult to obtain for buyers.
"With rising input prices squeezing profit margins, companies are finding it harder to pass on costs to consumers, leading to reduced retail sales," Eisenga continued. "I expect we will see 3 to 4 rate cuts in 2025, with the prime rate potentially falling to between 5.5% and 6.25% by the end of the year."
Eisenga also noted that the Federal Reserve's unemployment target of 4.4% is likely to be hit by the next meeting in May, a development that will likely prompt the Fed to accelerate its rate-cutting measures. Higher interest rates are particularly problematic for the commercial real estate sector, which remains a major concern for banks.
As the recession continues to take hold, Michael Eisenga urges businesses and consumers to prepare for a challenging year ahead as the economy faces continued pressures.
Contact Information:
Michael S. Eisenga
CEO, First American Properties
Email: meisenga@firstamericanusa.com
Website: www.mikeeisenga.com
