Economist Kathryn Edwards on why so many of us feel financially stuck even when the headlines say we're not in a recession.
Q1 2026 has been a lot. Tariffs. Oil prices. A war in the Middle East. Recession chatter. The economic news has been coming at us from every direction, and it’s difficult to sort through the noise and know what any of it means for our money, lives, and our futures.
This week on HerMoney, Jean Chatzky sat down with economist Kathryn Edwards to do something a little different. Instead of just reacting to the news of the week, they took a step back, looked at everything that happened in Q1, made sense of it, and then looked ahead to what Q2 might bring. Think of it as your quarterly economic report card, with a roadmap for what comes next.
Here’s what you need to know.
Are We in a Recession? The Answer Is More Complicated Than You Think
The question everyone is asking right now — are we in a recession? — doesn’t have a simple yes or no answer. And according to economist Kathryn Edwards, that’s actually by design.
“How do you know when you’ve had a bad week?” she asks. “A bird poops on your head Monday morning. It hasn’t gone great so far, but it’s still Monday. You need to let the week evolve. But if by Thursday you’ve gotten into a car accident, failed a test, missed a car payment, you could say, all right, this week is bad. That is exactly how recessions work. We don’t look at the first piece of bad news and say, that’s it, recession. We wait to see all of the data come in, and not just what data comes in, but how that data evolves.”
What the data is currently showing is not reassuring. In 2025, the US added just 164,000 jobs, the lowest number outside a recession this century. The US has shed jobs every other month since June. And Kathryn says there is now a real case building that a recession may have already started in the fourth quarter of 2025.
“The economy is teetering on the edge,” she says. “You cannot pursue multiple destructive economic policies and not have that bill come due.”
From Boom Talk to Recession Odds: How Did We Get Here So Fast?
At the start of 2026, the White House was projecting 4% GDP growth. Now economists are debating recession odds. So what happened?
Kathryn is direct: the 4% projection was never realistic. “The White House economic projections are essentially making the economic data fit what Trump says will happen, as opposed to the other way around,” she says. “The slow slowing of our economy is just starting to bite. You can’t be slowing down for four years without having some kind of reversed direction.”
She lists the contributing factors plainly: raising interest rates intentionally hurt the economy to bring down inflation, but prices didn’t come down. Tariffs hurt the economy. Firing federal workers hurts the economy. And now, a war in the Middle East has sent oil prices above $100 a barrel and effectively closed the Strait of Hormuz.
As for how long the conflict needs to last for the economic damage to become truly lasting, Kathryn says the number economists are circling is about two and a half months of elevated oil prices before cascading recessionary effects kick in.
Why Kathryn Edwards Is Still an Optimist
“The vast majority of Americans are in support of the policies that our economy needs,” Kathryn says. “That is the hardest part: getting Americans on board with the type of investments we need to make. They’re there. Their elected leaders aren’t there, but they’re there.”
Paid family leave. A higher minimum wage. Affordable childcare. Healthcare that doesn’t bankrupt a family when someone gets sick. These aren’t radical ideas, and Kathryn believes that as more Americans feel the squeeze in their own lives, the gap between what people want and what their leadership delivers is becoming impossible to ignore. “You just have to want to move forward,” she says. “And that’s where we are.”
MORE ON HERMONEY:
- Are We in a Recession? Here’s What the Economist Behind the Most Accurate Indicator in History Says
- What the Trump Economy Means for Women
- The Ultimate Guide to Building a Financial Safety Net as a Woman
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