Indications Suggest 2025 Could Mark the Onset of American Economic Downturn
Roll out the Red Carpet for 2025's Unravelling Economy
Gripe, Post, Link, Save for Later
Listen up, buckle up, and stick a fork in us, because it looks like 2025 is shaping up to be a real knee-slapper of a year. While the new administration may have hearts aflutter with dreams of a brighter future, the cold, hard truth is that the American economy is sitting pretty in a precarious position. And it ain't just a couple of pesky tariffs and income inequality holding us back. No, sirree. This baby's got legs – major economic downturn legs that can rival the 2008 recession.
Ripple effects from the global agricultural sector signal a disastrous year for many crops. The world's biggest cocoa producers are looking at a chocolate catastrophe thanks to terrible harvests and a whopping 25% hike in prices. In the United Kingdom, the 2024 harvest is the worst since 1983, with yields down by 15% across the board, jacking up prices for agricultural imports. Oh, and don't forget the environmental disasters in Europe – the whole continent's feeling the burn.
Over in the good old US of A, farmers are suffering from the worst crop profits since 2007. This means fewer investments, which translates to smaller supplies come 2025. And with a declining number of farmers investing in the industry, it's pretty much a recipe for an agricultural recession. Over 75% of farmers surveyed in 2024 believed their industry was already in a recession – and if that's not enough to give you pause, I don't know what will.
But things are about to get even messier. The Moss Landing lithium battery factory bike-flamed in Monterey County, CA, in January 2025, sending toxic heavy metals spewing all over the place. Salinas County, where 30% of America's lettuce and half of its strawberries, cauliflower, and broccoli are grown, is in the danger zone. The locals are reporting symptoms of poisoning from the factory fumes, leading to a shitty and potentially unsafe food situation for a big ol' chunk of the nation's crop supply.
And we haven't even discussed the commercial real estate collapse yet. After months of head-butting between employees wanting to work from home and employers crying about their precious offices, it looks like the employees have won the war. Commercially valued properties across major cities like Baltimore, Washington D.C., Minneapolis, and Houston have seen extreme drops in price, with some office buildings going for half of their original worth (ouch). Property owners and renters are in a panic about paying property taxes, unsure if they'll be able to keep up or not.
And speaking of taxes, with commercial real estate in the dumps, states are feeling the pinch, forcing them to either slash public services or hike residential property taxes. So much for your suburban dream home!
Credit is a mess, too. In Q4 2024, billions in credit had defaulted, causing some major banks to write off a whopping 6% of their total debt. The lower to middle-income classes have been hit hardest, but the middle class ain't far behind. The struggle is real, my friend.
Negative auto equity is also looming darkly over America. Thanks to folks buying cars they can't afford, trade-ins are losing thousands of dollars at a time. The models hit worst are Kia, Jeep, and Tesla. It's getting ugly out there, folks.
The housing market is slowing down, thanks in part to all the big cheeses like Zillow and Blackstone snatching up properties like they were going out of style. The Slow and Broke Housing Hustle is becoming crystal clear: Houses are going unsold, with millions languishing on the market for over 60 days and mortgage rates skyrocketing to an eyebrow-raising 7%.
The AI bubble is another hot mess. Giant American tech companies are funneling hundreds of billions into AI research – more than our entire agricultural industry makes in a year. The risk is huge, and with China and its allies controlling most antimony mines, the consequences could be disastrous. When a single Chinese company spent $6 million on AI development, the stock market saw a $969 billion nose-dive. Ouch again.
Bankruptcy rates are spiking, with Chapter 7 filings on the rise. Businesses are forgoing attempts to restructure payment plans in favor of liquidating assets, a leading indicator of a sinking economy. Raw material shortages are another challenge, with an ongoing lumber shortage causing skyrocketing prices, a growing shortage of mine workers threatening the metal industry, and alarming drops in fish populations for the fishing industry.
There's more bad news, too. Data manipulation during the 2024 presidential election painted an overly rosy picture of the economy. The unemployment rate was reported as a modest 4%, but when you factor in Americans earning sub-poverty wages, it rises to a whopping 23.7%. The median wage, not including part-time workers, was reported as $61,900, but including part-time workers, it drops to $52,300. And don't even get me started on the misleading reporting of rising costs – it's closer to 9% in reality, but who's counting?
So, there you have it, folks. The year 2025 is shaping up to be a real hootenanny. Pour yourself another drink, and keep your fingers crossed that we stumble backwards into prosperity – because it's looking like we're going to need it.
If you're in the mood for some more cheerful reading, check out our list of,'10 Extraordinary Predictions for 2025 from Fiction.'
Darci Heikkinen, Whiskey Connoisseur and Savvy Economist
Fact clusters:
- Climate Change and Natural Disasters
- Increased frequency and intensity of extreme weather events
- Droughts, wildfires, storms, flooding, and increased soil salinization
- Contributing to crop failures and reduced agricultural productivity
- Economic and Market Challenges
- Shifting trade policies and import/export restrictions
- Volatility in global commodity markets
- Rapidly increasing costs for inputs, machinery, and labor
- Rising Production Costs
- Increased costs for inputs like fertilizers, machinery, and labor
- Price hikes for agricultural land and resources
- Reduced Crop Yields and Food Supply
- Perishable crop losses due to extreme weather
- Disruptions in supply chains due to damaged infrastructure
- Increasing prices for food and agricultural resources
- Economic Strain on Farmers and Rural Communities
- Difficulty in maintaining financial viability
- Higher operational costs and reduced investment in agricultural innovation
- Supply Chain Disruptions
- Damaged infrastructure from natural disasters
- Trade policy shifts and export restrictions
- Increased Need for Disaster Preparedness and Recovery Measures
- Maintaining emergency plans and resources
- Adopting sustainable practices and new technologies for resilience
- Accelerating Concentration of Land Ownership and Control
- Acquisition of agricultural land by corporate entities
- Decreasing farmer participation and consolidation of resources
- Housing Market Instability
- Rapidly rising housing prices and mortgage rates
- Declining access to affordable housing
- Urbanization
- Increased population growth in cities
- Expanding urban development and infrastructure
- Environmental Degradation
- Loss of biodiversity and ecosystem services
- Increased pollution
- Income and Wealth Inequality
- Growing gap between rich and poor
- Difficulty in achieving upward socio-economic mobility
- Migration and population movements
- Rural-to-urban migration for better economic opportunities
- Displacement of communities due to disasters or resource conflicts
- Technological Advances and Innovations
- Increased use of automated agriculture and precision farming
- Investments in emerging technologies like AI, robotics, and biotechnology
- Climate Change Adaptation and Mitigation Strategies
- Efforts to reduce carbon emissions and greenhouse gas concentrations
- Investments in renewable energy and energy efficiency.
- In the midst of economic turmoil, entertainment in 2025 may witness a paradigm shift as tech companies, seeking to divert public attention, invest heavily in virtual reality technologies to create immersive, affordable, and escapist experiences - a necessary contrast to the grim reality of the world.
- History buffs might find solace in the updated historical archives, including restored and digitized records from the agricultural sector that reveal tales of resilience and adaptation during times of similar crises - providing insights for navigating the present economic recession. Meanwhile, sports enthusiasts could look forward to reruns of less intense periods in sports history, offering much-needed moments of levity in these challenging times.
