In tough economic times, everyone’s looking for financial advice they can take to the bank. It’s not as fun, though, when the bank talks back — especially if it’s delivering a major recession warning.
Recently, global investment bank UBS announced that, after crunching some “hard data” from between May and July 2025, there’s a 93% chance of the U.S. entering a recession this year [1].
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“UBS’s forecast was based on its assessment of several objective economic indicators like personal income, consumption, industrial production and employment,” according to Newsweek [2].
However, despite that staggeringly-high number — and UBS’s determination that the economy has reached “historically worrying levels” — the bank technically isn’t predicting a recession. Instead, UBS declared that the U.S. economy is “soggy, soft, weak, yes, but not collapsing,” according to Fortune [3].
That’s marginally better, but far from enough to alleviate recession fears in the coming months. And, as Fortune pointed out, even if a recession doesn’t come to pass, many experts say “the economy is headed for a bout of 1970s-style ‘stagflation,’ a combination of a stagnating economy and rising inflation.”
The recession question — will it happen?
The UBS report comes on the heels of a dismal August jobs report released by the Bureau of Labor Statistics on September 5, showing the U.S. economy added just 22,000 jobs [4] — way down from the 80,000 some economists predicted [5].
The unemployment rate rose to 4.3% — its highest since hitting 4.6% in October 2021 [6] — while Black unemployment edged up to 7.5%.
The latter stat can serve as a negative bellwether for the overall job market since Black Americans disproportionately work lower income or temporary jobs that employers cut first when tightening their purse strings in a downturn. In early September, government numbers also showed that unemployed workers outnumbered job openings in the U.S. for the first time since April 2021.
All of this, combined with the UBS findings, continue to keep experts on their toes about the possibility of an upcoming recession. Arindrajit Dube, an economics professor with the University of Massachusetts Amherst, told Newsweek that he thinks “the totality of evidence is increasingly pointing to a slowdown in the labor market that could reflect a recession.” [2]
Meanwhile, Moody’s Analytics chief economist Mark Zandi told Business Insider that, “Everything is clinging tightly to the lip of the cliff. We had 10 fingers on the edge of the cliff a couple months ago, we now [have] seven fingers. A couple more fingers, then we’re going over the edge.” [7]
And following July’s terrible jobs report, JP Morgan warned that, “We have consistently emphasized that a slide in labor demand of this magnitude is a recession warning signal.” [8]
While the jobs numbers worsened in August, JP Morgan CEO Jamie Dimon recently shared his thoughts. “I think the economy is weakening,” Dimon told CNBC. “Whether it’s on the way to recession or just weakening, I don’t know.”
Read more: Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
How to financially prepare for a recession
Whether the U.S. actually slides into a recession or not, it’s important to have your financial ducks in a row just in case. Here are some important steps to get you started.
Get liquid
Many experts suggest the first step to prepping for a recession is to make sure you have liquidity in your finances.
Morgan Stanley advises that you should “determine what you will need for the next 6-12 months for expenses and larger expenditures and keep this money parked in cash. This helps to prevent having to sell an investment when the market is down.” [9]
David Peterson, Fidelity’s head of wealth planning, agrees — especially if you lose your job. “You want to try to ensure you have enough liquidity to get through those periods,” he explained. Peterson added that if you don’t want to keep all your liquid funds in cash, “consider a relatively low-risk investment that you can depend on if you do need to access it.” [10]
Budget wisely
Once you’ve got your funds in order, you’ll want to make sure that you budget them accordingly. Unsurprisingly, experts recommend planning out a budget and sticking to it, ensuring that your money lasts as long as possible during down times.
In addition, if you can establish or save for an emergency fund, all the better if a recession — or recession-related unemployment — drags out longer than expected.
Pay down debt
Equifax notes that paying down debt ahead of a recession can help if the economy — and your ability to earn a steady paycheck — goes sideways. “You should prioritize how you pay your bills, so your available cash covers as many debts as you’re able.” [11]
Equifax adds that you should make rent/mortgage and car payments a priority, so you don’t compromise your living situation or ability to travel to work. After that, aim for payments like credit cards or student loans — which, Equifax notes, sometimes offer the ability to claim hardship assistance during financial downturns.
Have a backup plan
Equifax also suggests having a Plan B in the event that you’re laid off. That could include anything from a side hustle to bring in extra cash, to updating your resume and reaching out to contacts as a means of laying the foundation for future employment in the event you lose your job.
Don’t panic-sell your investments
Charles Schwab advisers note that panic-selling on the market during a downturn could prove disastrous in the long run. “For example, 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.” [12]
Instead, the advisers say that, beyond regular “portfolio maintenance” with your investments, “it’s important to stay the course so you can potentially benefit from the eventual recovery” — as long as you have both the funds and the time to wait it out.
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[1]. Wion. “US economy staring at recession? Global investment bank puts risk at 93%. Here’s why”
[2]. Newsweek. “Recession Probability Surges to 93%: UBS”
[3]. Fortune. “UBS gives America a recession checkup and sees a 93% probability from the hard data, with a ‘soggy’ economy ahead”
[4]. Bureau of Labor Statistics. “THE EMPLOYMENT SITUATION — AUGUST 2025”
[5]. CBS News. “The August jobs report has economists alarmed. Here are their 3 top takeaways.”
[6]. Bureau of Labor Statistics. “THE EMPLOYMENT SITUATION — OCTOBER 2021”
[7]. Business Insider. “’Edge of the cliff’: A top economist says the US is in a full-blown labor recession that risks spilling into the rest of the economy”
[8]. The Daily Hodl. “JPMorgan Chase Warns US Economy Flashing Recession Signal After 258,000 Jobs Growth Revision: Report”
[9]. Morgan Stanley. “Top 3 Ways to Build Wealth During a Recession”
[10]. Fidelity. “6 ways to recession-proof your life”
[11]. Equifax. “5 Ways to Prepare for a Recession”
[12]. Charles Schwab. “5 Tips for Weathering a Recession”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.