Major bank raises red flag on US economy — warns of 93% chance of recession based on ‘hard data.’
Here are 5 crucial money moves you need to make now
When financial institutions start issuing recession warnings, it's time to pay attention. The numbers don't lie, and right now, they're painting a concerning picture of America's economic landscape.
The 93% Warning Signal
Global investment powerhouse UBS has dropped a bombshell that's reverberating through financial circles. After analyzing hard economic data from May through July 2025, the bank calculated a staggering 93% probability that the United States will slip into recession this year [1]. This isn't mere speculation—UBS based its forecast on concrete indicators, including personal income trends, consumer spending patterns, industrial output, and employment figures.
Yet in a curious twist of economic diplomacy, UBS stops short of making an outright recession prediction. Instead, they characterize the economy as "soggy, soft, weak, yes, but not collapsing". It's the kind of qualified optimism that offers little comfort when your financial future hangs in the balance.
Even if we dodge the recession bullet, many economists warn we may be heading toward something equally troubling: 1970s-style stagflation—that toxic combination of economic stagnation and rising prices that can strangle household budgets.
The Job Market's Distress Signals
The August employment report delivered a gut punch to economic optimists. The Bureau of Labor Statistics revealed that employers added a mere 22,000 jobs —falling dramatically short of the 80,000 that economists had projected. Meanwhile, unemployment climbed to 4.3%, its highest level since October 2021's 4.6% .
Perhaps most telling is the rise in Black unemployment to 7.5%. This demographic often serves as an economic canary in the coal mine, as Black Americans are disproportionately employed in lower-wage and temporary positions—the first jobs to vanish when companies tighten their belts.
Adding fuel to the fire, government data revealed that unemployed Americans now outnumber available job openings for the first time since April 2021—a reversal that signals deep structural shifts in the labor market.
Expert Voices Sound the Alarm
The academic and financial communities are increasingly unified in their concern. Arindrajit Dube, an economics professor at the University of Massachusetts Amherst, told Newsweek that "the totality of evidence is increasingly pointing to a slowdown in the labor market that could reflect a recession".
Moody's Analytics chief economist Mark Zandi offered perhaps the most vivid metaphor for our current predicament: "Everything is clinging tightly to the lip of the cliff. We had 10 fingers on the edge of the cliff a couple of months ago; we now have seven fingers. A couple more fingers, then we're going over the edge".
JP Morgan has been equally blunt, warning that "a slide in labor demand of this magnitude is a recession warning signal". Even CEO Jamie Dimon, typically measured in his public statements, acknowledged to CNBC: "I think the economy is weakening. Whether it's on the way to recession or just weakening, I don't know."
Building Your Financial Fortress
Whether recession strikes or merely threatens, smart preparation can mean the difference between weathering the storm and getting swept away. Here's how to bulletproof your finances.
Prioritize Liquidity
Cash may not be king in bull markets, but it becomes sovereign during economic turbulence. Morgan Stanley recommends calculating your expenses and major expenditures for the next 6-12 months, then parking that amount in readily accessible funds. This strategy prevents the devastating scenario of selling investments at rock-bottom prices during market downturns.
David Peterson, Fidelity's head of wealth planning, emphasizes this point for job security: "You want to try to ensure you have enough liquidity to get through those periods." If keeping everything in cash feels too conservative, Peterson suggests considering low-risk investments that remain accessible when needed.
Master the Art of Strategic Budgeting
Liquidity means nothing without disciplined spending. Create a recession-ready budget that stretches every dollar and establishes clear priorities for essential versus discretionary expenses. Building or bolstering an emergency fund becomes crucial insurance against extended economic downturns or unexpected unemployment.
Eliminate Debt Before It Eliminates You
Equifax emphasizes the wisdom of debt reduction ahead of economic storms. "You should prioritize how you pay your bills, so your available cash covers as many debts as you're able" . Focus first on housing costs—rent or mortgage—and transportation expenses that keep you employed and sheltered. Credit cards and student loans, while important, typically offer hardship programs during financial crises.
Develop Your Plan B
Economic uncertainty demands backup strategies. Whether it's cultivating a side hustle, updating your professional network, or refreshing your resume, having alternative income sources and employment prospects can provide psychological comfort and practical benefits when primary income streams face threats.
Resist the Panic-Selling Trap
Market volatility can trigger emotional decision-making that destroys long-term wealth. Charles Schwab's research demonstrates the dangers of panic-selling: "Moving your portfolio into cash for just one month following a market decline of 20% or more would cut your returns almost in half one year later" .
The key is maintaining perspective and staying invested for eventual recovery—provided you have both the financial cushion and time horizon to ride out the storm.
Economic forecasting isn't fortune-telling, but when institutions like UBS assign 93% probability to recession, prudent individuals take notice. Whether we experience a full recession, prolonged stagflation, or merely an extended period of economic weakness, financial preparation remains your best defense.
The economy may be "clinging to the cliff's edge," but your personal finances don't have to follow it over. Smart planning, disciplined execution, and steady nerves can help you navigate whatever economic weather lies ahead.
Turn Autumn Into Income
As America's favorite season arrives, a wave of unique opportunities emerges for savvy entrepreneurs. This guide visualizes the most profitable side hustles to capitalize on this fall.
The Handmade Holiday Advantage
With ongoing supply chain concerns, the market for holiday decorations is shifting. A staggering 87% of Christmas decor is typically imported, creating a massive opening for local artisans to meet demand with unique, handcrafted goods for Halloween, Thanksgiving, and Christmas.
This data highlights the significant gap local creators can fill, offering products that stand out from mass-produced items and commanding premium prices.
Top Earning Fall Hustles
While opportunities abound, certain hustles show significantly higher earning potential. This chart compares the estimated hourly income for three popular fall side hustles, providing a clear look at where you can maximize your time and effort.
Explore Your Niche: Top Fall Hustles
🍂Lawn & Landscape
Capitalize on the messiest part of fall. Offer leaf removal, gutter cleaning, and garden winterization services to homeowners who would rather outsource the work.
👻Spooky Tour Guide
Monetize local lore and the supernatural atmosphere of autumn. Research local ghost stories to create compelling walking tours for tourists and locals alike.
🐶Pet Services
Cooler weather is perfect for pets. Expand beyond dog walking to offer pet sitting for holiday travelers or pet photography against a beautiful fall backdrop.
📷Seasonal Photography
Use fall's golden hour and vibrant foliage as a natural studio. Offer family portraits, engagement photos, or senior pictures in picturesque outdoor settings.
📚Academic Tutoring
As students face new challenges in the school year, demand for tutors peaks. Offer your expertise in high-demand subjects like math, science, or test prep.
🎨Handcrafted Decor
Fill the supply gap for holiday decorations. Sell unique, handmade items on Etsy, at local craft fairs, or directly to retailers looking for special inventory.
Your Roadmap to Success
Start Early
Begin marketing your services in late August to build momentum before the seasonal rush hits.
Bundle Services
Create attractive package deals, like combining leaf removal with gutter cleaning, to increase your average sale.
Build for Winter
Use fall connections to line up winter clients for services like snow removal or holiday decoration takedown.
Document Everything
Take high-quality photos of your work to build a professional portfolio for social media and future marketing.