Is the U.S. economic model running out of steam? Numerous indicators suggest that the world’s leading economic power may be heading into a recession. Here’s an update…
United States: Record Layoffs at the Start of the Year
Donald Trump’s arrival in the White House clearly marks a shift in the management of the U.S. economy, both domestically and internationally, to the point that he recently praised the significant decline in the dollar that has occurred since the start of his term.
This situation is compounded by the abysmal U.S. debt, now estimated at $38.5 trillion—or, to put this figure in more concrete terms, a national debt estimated at approximately $111,000 per American citizen, which entails paying $3 billion in interest per day.
In this already complicated context, new data has just shaken the little confidence that some analysts still had: more than 100,000 job losses were recorded in January alone, a record not seen since 2009, in the midst of the recession.
January layoffs hit a 17-year high. U.S. employers announced 108,435 layoffs in January, a 205% increase from December and the highest January total since 2009, according to Challenger, Gray & Christmas.
Walter Bloomberg
Worst January for job cut announcements since 2009
At the forefront of these job cuts are giants UPS (30,000) and Amazon (16,000), whose stock has just plummeted by more than 10% following the release of its Q4 2025 results.
A total that is “particularly high for a January,” according to an official at Challenger, Gray & Christmas, who notes that “employers are not very optimistic about the outlook for 2026.”
Is the U.S. economy entering a recession?
A wave of layoffs that can be linked to the critical situation facing many tech companies, which are struggling to meet their loan payments. As a result, the distress rate for tech bonds has reached a high not seen since the fourth quarter of 2023, nearing 9.5%.
At the same time, the real estate market is struggling to find buyers. This is a major problem, as this sector is seen as essential to maintaining a strong economy. Indeed, as the X Crypto Rover account explains, “when real estate slows down, it affects construction, banks, credit, and consumer confidence—all sectors closely linked to recessions .”
In this context, a rate cut by the Federal Reserve (Fed) could help alleviate these economic tensions. This has been a recurring demand from Donald Trump, which recently led to outright harassment of Fed Chair Jerome Powell, to the point of undermining market confidence in the institution’s necessary independence. And it goes without saying that the announced arrival of his replacement raises more questions than it answers on this subject.
Finally, the yield spread between 2-year and 10-year U.S. Treasury bonds is currently at a historically high level over the past four years. This situation, known as “bear steepening,” results from persistent inflation, high debt, and widespread loss of confidence.
All of these factors generally appear to be the early signs of an imminent recession.
