Gov. Spencer Cox has instructed all state administration heads to plan for a possible recession.
“We really do prepare for downturns,” the Utah Republican said Tuesday morning during a news conference related to Utah’s economic outlook relative to other states. “We understand the business cycle, the innovation cycle.”
State officials are “constantly stress-testing our budgets,” Cox said, and he has instructed departments to plan for three levels of cuts if the country does slide into a recession.
The stock market has been on a tumultuous ride after “Liberation Day” on April 2, when President Donald Trump announced plans to implement the most sweeping tariff hikes since before the Great Depression.
After global markets fell into disorder, Trump then reversed course on the tariffs and issued a 90-day pause on many of the tariffs he had just implemented, The Associated Press reported.
While Cox did not point to a reason for recession preparations, he has repeatedly expressed skepticism over tariffs, saying during a news conference on PBS Utah last month that they are a “huge gamble.”
The National Bureau of Economic Research defines recession as a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.” Business consultants with McKinsey & Co. say a recession is the result of “imbalances in the market, triggered by external or internal factors” over two consecutive quarters, or six months.
European Union Ambassador Jovita Neliupšienė warned about the effects of tariffs during a visit to Utah last week, pointing to the nearly $10 billion in trade annually between Utah and EU member countries.
JPMorgan Chase CEO Jamie Dimon told Fox Business host Maria Bartiromo it was “probably” a “likely outcome” that they would spur a recession.
The administration has said a recession won’t happen this year — and Forbes reported that Bank of America CEO Brian Moynihan said Tuesday the bank’s research team doesn’t expect to see one.
But other top executives, including Bridgewater Associates’ Ray Dalio and BlackRock CEO Larry Fink, still fear a recession or at least a slowdown.
An April survey by Chief Executive found CEOs have the lowest level of confidence in current business conditions since the coronavirus pandemic led to shuttered doors in spring 2020. The magazine surveyed 329 CEOs and business owners in the days after the tariff announcement.
“Their outlook for the year to come remains stalled at a multiyear low as well,” a summary of the survey results reads.
As recently as Monday morning, Goldman Sachs CEO David Solomon still foresaw a recession.
“The prospect of a recession has increased, with growing indications that economic activity is slowing down around the world,” Solomon said in a Monday earnings call, according to The Guardian.
And the Federal Reserve Bank of San Francisco is tracking the job-finding rate and rise in time spent out of work as a flashing yellow light for recession risk, according to research published Monday.
Megan Banta is The Salt Lake Tribune’s data enterprise reporter, a philanthropically supported position. The Tribune retains control over all editorial decisions.
