Why Gen Z fears a recession — and smart ways to protect their finances

Christy Bieber

Wed, Apr 16, 2025, 3:37 AM 5 min read

Making six figures should feel like financial freedom — but for one 26-year-old posting to Reddit, it’s a source of stress as fears of a looming recession weigh heavily on her.

Despite earning a $100K salary, having just $2,500 in monthly expenses, fully paid-off student loans, $7,500 in savings and $40,000 in a 401(k), this Gen Zer, or Zoomer, is still concerned about how a downturn could impact her finances — and how she can stay stable if the economy takes a turn for the worse.

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She's not alone. An Ipsos poll released on April 2 revealed that 61% of Americans believe the U.S. will experience a recession within the next year.

There are many reasons why so many people fear an economic downturn — and why this young person is panicking about the potential fallout. The good news is that there are ways Zoomers and other young adults can prepare for a potential recession and protect their long-term financial health.

One of the main drivers of today’s recession fears is President Trump’s tariff policy — especially the introduction of taxes on goods imported into the United States.

Tariffs have become such a major concern that financial firm J.P. Morgan initially estimated the probability of a recession at 40% in late March. However, after Trump announced widespread tariffs would go into effect on dozens of countries — and after several of those countries, including China, began to retaliate — J.P. Morgan raised its estimate to 60%.

The stock market responded by plunging, spooked by fears of rising costs and a potential trade war. This volatility led JP Morgan and others to warn of broader consequences, not just for the U.S. economy but also for global markets.

Beyond tariffs, Americans are also concerned about a recession due to ongoing economic uncertainty. The Trump administration has promoted itself as a change administration, pushing for massive cuts to the federal workforce — changes that could have ripple effects across the broader economy.

Even though the President announced a 90-day pause on tariffs, save for China, recession concerns continue. The back-and-forth over trade policy has only added more uncertainty, making it difficult for consumers and businesses to plan for the future.