Is the US economic model running out of steam? Many indicators suggest that the world’s leading economy is sliding into recession. We take stock of the situation…
United States: record layoffs at the start of the year
Donald Trump’s arrival in the White House has clearly marked a change in the management of the US economy, both domestically and internationally, to the point where he recently welcomed the significant decline in the dollar since the start of his term.
This situation is compounded by the US’s abysmal debt, now estimated at $38.5 trillion, or—to put this figure in more concrete terms—an estimated national debt of approximately $111,000 per US citizen, which implies the payment of $3 billion in interest per day.
In this already complicated context, a new development has 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 reach a 17-year high. U.S. employers announced 108,435 layoffs in January, up 205% from December and the highest January total since 2009, according to Challenger, Gray & Christmas.
Walter Bloomberg
At the forefront of these job cuts are giants UPS (30,000) and Amazon (16,000), whose stock has just fallen by more than 10% following the publication of its fourth quarter results for 2025.
This is a “particularly high total for a month of January,” according to an official at Challenger, Gray & Christmas, who notes that “employers are not optimistic about the outlook for 2026.”
Is the US economy entering a recession?
This wave of layoffs can be linked to the critical situation facing many technology 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, at close to 9.5%.
At the same time, the real estate market is struggling to find buyers. This is a major problem, as this sector is 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 cut in interest rates by the Federal Reserve (Fed) could ease these economic tensions. This is a recurring demand from Donald Trump, which recently led to outright harassment of Fed Chairman Jerome Powell, to the point of undermining market confidence in the necessary independence of this institution. 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 US bonds is currently at a historic high over the last four years. This situation, known as “bear steepening,” is the result of persistent inflation, high debt, and widespread loss of confidence. All of these factors are generally seen as precursors to an imminent recession.
