Whether it comes up in your social feed, on podcasts, or in casual conversation with friends, talk of a looming recession seems everywhere. It’s an understandable concern. We’ve been through a period of high inflation, rising interest rates, lingering impacts from the pandemic, and uncertainty related to tariffs. Even given these concerns, I just don’t see a recession in the near future.
That might sound surprising, given all the headlines. But setting aside the chatter and focusing instead on the fundamentals, I see reasons to believe the U.S. economy remains on solid footing.
Consumer Still Spending
One of the clearest signs the economy isn’t slowing down is that Americans are still spending. Consumer spending accounts for about 70% of the U.S. economy, and even with higher prices and interest rates, spending has remained remarkably resilient. People are still traveling, eating out, going to concerts, and buying big-ticket items.
While inflation has chipped away at purchasing power over the past few years, the good news is that wages have been going up faster than prices lately. That means people’s incomes are finally starting to stretch a bit further, which should help keep spending strong.
According to J.P. Morgan’s Guide to the Markets published May 30, consumers remain in relatively strong shape. Here are a few highlights:
Debt Servicing Is Manageable: Household debt service as a percentage of disposable income remains near multi-decade lows. Even with higher interest rates, most families are not over-leveraged.
Net Worth Remains Elevated: Total U.S. household net worth has stabilized at high levels, thanks to stock market recovery, rising wages, and strong home equity.
Savings Buffers Still Exist: While the excess savings from the pandemic have declined, many middle- and upper-income households still have financial cushions in place.
Credit Delinquencies Are Low: Auto loans, credit cards, and other consumer credit categories are not showing widespread distress. Delinquencies have risen modestly but remain well below historical averages.
In short, U.S. consumers are far from tapped out.
Labor Market Stays Resilient
Another key indicator of economic health is employment, and here too, the data is encouraging. Unemployment remains low by historical standards, currently at 4.2% compared to a 50-year average of 6.1%.
Job openings are down from recent highs, but voluntary quits (employees leaving their jobs by their own choice) are ticking up while layoffs are trending down. These are signs that both workers and businesses feel cautiously optimistic about the current economic environment.
The Fed Is Taking a Cautious Approach
Much of the recession talk stems from the Federal Reserve’s efforts to cool inflation by raising interest rates. Many predicted that raising interest rates so rapidly and by so much in 2022 would eventually drive the economy into a recession as happened in the early 1980s.
Late last year and early this year, the Fed did begin to lower interest rates. There are new signs that the Fed is likely to continue lowering interest rates at its upcoming meetings. Inflation has come down meaningfully from its peak, and the Fed has signaled its willingness to pause or even cut rates if the data support it. Its goal is to strike a balance; slowing inflation without triggering a downturn, the so-called “soft landing.” So far, it’s been walking that line effectively.
Truckee, North Lake Tahoe’s Tourism Remains Strong
Tourism is the economic lifeblood of our region, and the latest data confirms it remains resilient.
According to Visit Truckee-Tahoe, visitor spending, tourism-related employment, earnings, and tax revenue in Truckee are all above pre-pandemic levels.
Additionally, data from the North Tahoe Community Alliance show that both Tourism Business Improvement District (TBID) assessments and Transient Occupancy Tax (TOT) receipts increased year-over-year through the first quarter of 2025, at 13.3% and 10.5% respectively.
In plain terms, visitation and spending continue, supporting local jobs and businesses.
No Crystal Ball — But Reasons for Optimism
Of course, no one can predict the future with certainty. Shocks can happen, and economic conditions can change quickly. But based on the data available today, I believe the odds of a near-term recession are lower than many assume.
The economy isn’t booming, but it’s not breaking down either. It’s slowing in some areas, adjusting in others, and proving far more resilient than many expected. While it’s always wise to be prepared for uncertainty, it’s equally important not to get caught up in fear that’s not supported by the data.
What Should You Do?
In uncertain times, your best strategy is to stick with a long-term financial plan, stay diversified, and avoid emotional decisions based on short-term headlines. If you’re feeling unsure about the economy or your investments, talk to your advisor. A well-crafted plan already accounts for periods of volatility and economic slowdown, without assuming the worst.
So yes, there’s been a lot of chatter about recession. However, watching national data, local trends, and financial markets, I see more stability than trouble. Stay focused on what you can control, trust in long-term planning, and remember that the U.S. economy has a strong track record of bouncing back.
