Economists See 15% U.S. Recession Risk Persisting After Democratic Midterm Sweep
Updated
Updated · CNBC · Nov 5
Economists See 15% U.S. Recession Risk Persisting After Democratic Midterm Sweep
3 articles · Updated · CNBC · Nov 5
Summary
A Democratic sweep is unlikely to quickly change the main forces driving the U.S. economy, with economists saying executive-led policies on tariffs, Iran and immigration will keep restraining growth and lifting inflation risks.
3.7% CPI inflation in September, up from 2.3% in April 2025, and real wages down 0.7% from a year earlier underscore the affordability squeeze even as GDP grew 3.4% and unemployment held at 4.2%.
AI remains a key support for growth but also a vulnerability, Mark Zandi said, because the expansion is increasingly tied to hyperscaler spending, equity valuations and a labor market he called fragile.
$40.5 trillion in national debt and a fiscal 2026 deficit near $2 trillion are also expected to persist, while Democrats may use debt-ceiling leverage to seek tariff rollbacks, limits on the Iran war and restored social spending.
Wall Street still broadly expects the expansion to continue, with RSM's Joseph Brusuelas projecting about 2.5% growth and only a 15% recession probability over the next 12 months.