By Stephen DeAngelis
I hesitate to bring up the word “recession.” In economic circles, the word “recession” is often treated with same caution as the word “MacBeth” in theatrical circles. It is a theatrical tradition, to refer to the play “Macbeth” as “The Scottish Play” or “The Bard’s Play” because of a superstition that speaking the name “Macbeth” in a theater brings bad luck, leading to accidents or misfortunes. Nevertheless, the possibility of “The R Word” has been raised more frequently in the past few weeks. For example, Gennadiy Goldberg, head of US interest rate strategy at TD Securities, observes, “Just a couple of weeks ago we were getting questions about whether we think the US economy’s re-accelerating — and now all of a sudden the R word is being brought up repeatedly. The market’s gone from exuberance about growth to absolute despair.”[1] What’s changed? Most economists point to the start of an international trade war, which took full flight on 2 April when President Trump announced a new round of tariffs. Despite a 90-day pause on those tariffs, talk of recession has continued.
It’s not just economists and business leaders who are starting to worry. Consumers are worried as well. The Conference Board reports that its March Consumer Confidence Index® “fell by 7.2 points in March to 92.9 (1985=100).”[2] Consumers also see a darker future, “The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — dropped 9.6 points to 65.2, the lowest level in 12 years and well below the threshold of 80 that usually signals a recession ahead.”
Is a Recession Inevitable?
With all this talk of recession, another Shakespeare reference comes to mind: “To be, or not to be, that is the question.” Back in 2022, James Duez, co-founder and CEO at Rainbird Technologies, was concerned the United States was “entering a deep and long-lasting recession.”[3] He had good reasons. Inflation was high, national debt was skyrocketing, and the so-called “Great Resignation” was in full swing. He lamented, “It’s economic doom and gloom everywhere at the moment, with a seemingly perfect storm of challenges confronting us as technology leaders and, frankly, as human beings.” Fortunately, the deep-and-long recession didn’t develop.
Today, we are facing another “perfect storm of challenges” that could result in a recession. Even the President isn’t sure whether his policies will result in a recession. As the editorial board at the Wall Street Journal reported, “Mr. Trump didn’t help the mood with his cagey response to a question by Fox News host Maria Bartiromo in a [9 March] interview about whether he expects a recession this year. ‘I hate to predict things like that,’ he replied. ‘There is a period of transition, because what we’re doing is very big.’ Asked later on [9 March] about his reluctance to rule out a recession, he again wavered, ‘I tell you what, of course you hesitate. Who knows?’ His uncharacteristic equivocation rattled markets that maybe he doesn’t mind a ‘little disturbance,’ as he put it in his speech to Congress.”[4]
Economic columnist Heather Long writes, “Almost every economist I talk with uses words such as ‘uncertain,’ ‘jitters’ and ‘shaky’ to describe the situation. … This could lead to a downward spiral: government cutbacks triggering layoffs in the private sector and spending cuts in health care, education and nonprofit services, which necessitate reductions at restaurants, stores and so on.”[5] Torsten Sløk, Chief Economist at Apollo, worryingly reports, “The March survey of consumer sentiment from the University of Michigan shows the following: Consumer sentiment is declining rapidly both for households making more than $100,000 and less than $100,000; consumer worries about losing their jobs are at levels normally seen during recessions; a record-high share of consumers think business conditions are worsening; households’ income expectations are declining; [and] inflation expectations are rising at an unprecedented speed. The bottom line is that consumer sentiment is deteriorating at an alarming rate.”[6] Long concludes, “Put all this together and it’s a recession tinderbox.”
Hoping for the Best, Preparing for the Worst
Although things aren’t looking great, there are no conclusive reasons to believe a recession is inevitable. Goldman Sachs recently “increased its odds of a recession over the next 12 months from 15% to 20%, writing in a note to clients that ‘we see policy changes as the key risk.'”[7] JPMorgan analysts are more pessimistic. They raised their forecast from a 40% chance to a 60% chance of a recession occurring this year.[8] In addition, “The OECD, an international research and policy organization, released its updated economic forecasts for 2025. Compared with its previous report, issued in December, the outlook has deteriorated significantly. Forecasts for both U.S. and global growth were downgraded and inflation predictions ratcheted upward. Many factors affect these analyses, but the OECD blamed two major forces: rising uncertainty and escalating trade wars.”[9] Despite the uncertainty, wise companies are hoping for the best but preparing for the worst.
Back in 2022, when a recession looked like a certainty, McKinsey & Company analysts, reminded business leaders that opportunities could be found even during a recession. They explained, “Growth is always a top priority for C-level executives but remains elusive for many. … Outperforming executives break the powerful force of inertia by prioritizing growth, a choice that shapes behavior, mindset, risk appetite, and investment decisions across the organization. Intriguingly, our research shows that growth-oriented leaders react decisively to shorter-term disruptions that can be turned into opportunities — what we term ‘timely jolts’ — and build organizational resilience and agility to respond to change and leverage disruption. A higher-for-longer environment is exactly the kind of jolt to growth that leading companies recognize and take advantage of.”[10] They concluded, “A structured approach to growth is paramount.”
Artificial intelligence (AI) solutions can help provide that structured approach. For example, the Enterra System of Intelligence® is a cutting-edge approach that combines the power of a human-like reasoning and trusted generative AI with glass-box machine learning and real-world optimization to drive intelligent decision-making and fuel business growth. Built using the Enterra Autonomous Decision Science® (ADS®) and Generative AI technology platform, it consists of the following business applications:
● Enterra Consumer Insights Intelligence System™. This System allows clients to quantitatively uncover and logically understand the inter-relationships that lead to heightened consumer understanding, hyper-personalized product recommendations, and new product innovation.
● Enterra Revenue Growth Intelligence System™ (ERGIS™). ERGIS systemically performs holistic revenue growth optimization (including optimizing strategic and tactical pricing, trade promotion, trade architecture, price pack architecture, media mix, customer segmentation, and assortment).
● Enterra Demand and Supply Chain Intelligence System™. This System concurrently performs non-linear demand and supply planning optimization.
● Enterra Business WarGaming™. Business WarGaming enables organizations to leverage their data to make strategic decisions by anticipating the moves of their competitors and taking direct action to beat the competition, mitigate risk, navigate uncertainty, and maximize market opportunity. Part of Enterra Business WarGaming is the Enterra Global Insights and Decision Superiority System™ (EGIDS™), which can help business leaders rapidly explore a multitude of options and scenarios.
Concluding Thoughts
As economic storm clouds gather, business leaders should remember, if a recession comes, it won’t last forever. On average, recessions last 11 months. Nevertheless, planning and preparation are important and they should begin now. The only certainty about the future is that it is going to continue to travel through a turbulent atmosphere. Companies can prepare themselves for the journey by anticipating risks and looking for opportunities. There is a Persian phrase that comes to mind, “This too shall pass.” The adage reminds us that all things, both good and bad, are temporary, encouraging patience and hope during difficult times, as challenges eventually come to an end. The current chaotic situation will eventually sort its way out. Organizations that proactively game the future will be in the best position to survive and thrive in the months and years ahead. If your company decides not to be proactive, you may hope another of Shakespeare’s phrases comes true: “Fortune brings in some boats that are not steered.”
Footnotes
[1] Michael Mackenzie, Liz Capo McCormick, and Bloomberg, “The bond market’s Trump trade is looking like a recession trade,” Fortune Magazine, 9 March 2025.
[2] Staff, “US Consumer Confidence tumbled again in March,” The Conference Board, 25 March 2025.
[3] James Duez, “Surviving The Perfect Storm,” Forbes, 17 October 2022.
[4] Editorial Board, “Will There Be a Trump Recession?” The Wall Street Journal, 10 March 2025.
[5] Heather Long, “A Trump recession has become a real possibility,” The Washington Post, 6 March 2025.
[6] Torsten Sløk, “Consumer Sentiment Deteriorating Rapidly,” Apollo Academy, 16 March 2025.
[7] Chris Morris, “We’re not in a recession yet—but analysts warn tariffs could push us into one,” Fast Company, 11 March 2025.
[8] Heather Gillers, “Global Recession More Likely Than Not This Year, JPMorgan Says,” The Wall Street Journal, 4 April 2025.
[9] Catherine Rampell, “Two forces are sinking the global economy. Both trace back to Trump.” The Washington Post, 18 March 2025.
[10] Stephan Görner, Arvind Govindarajan, Ezra Greenberg, John Kelleher, Ida Kristensen, Linda Liu, Asutosh Padhi, Alex Panas, and Zachary Silverman, “Something’s coming: How US companies can build resilience, survive a downturn, and thrive in the next cycle,” McKinsey & Company, 16 September 2022.
