Last week, the federal government shut down, with both Republican and Democratic plans to finance ongoing appropriations failing to garner enough votes to pass the Senate. Donald Trump did not seem overly worried about the situation, calling it an “unprecedented opportunity” to throttle funds going to blue states and fire federal employees. The stock market surged higher and the bond market did not react. But up to 750,000 workers will be furloughed, losing out on $400 million in wages a day. Every week that the government remains closed will cut the annualized GDP growth rate by 0.1 percent this quarter, Mark Zandi of Moody’s Analytics estimates. The White House forecasts that a month-long shutdown would lead to 43,000 Americans losing their job. The economy is already weakening in some important respects. Might this be enough to tip it into a recession?No, one might say, of course not: GDP is rising at a strong 3.8 percent a year. Yes, certainly, another might argue: Businesses have been on a months-long hiring freeze and the jobless rate is starting to tick up. No: The country is in the midst of a massive technology and infrastructure boom. Yes: Confidence is sinking, wage growth is slowing, and default rates are rising. No: The Federal Reserve is cutting interest rates, flushing cheaper money to credit-starved borrowers. Yes: The trade war and the White House’s immigration policies are causing sharp “Trump slumps” in Las Vegas and other communities. No: Consumer spending has remained remarkably resilient, despite high prices. I could go on like that for paragraph after paragraph; a reader could be forgiven for being confused, because what’s happening is confusing.[Read: The Project 2025 shutdown is here]Sometimes, the economy has a single story to tell. Toward the end of George W. Bush’s presidency, the housing market collapsed, causing a financial crisis that led to a catastrophic global downturn. Near the end of Trump’s first term, the coronavirus froze the economy in place, causing a brief but extreme recession and a long shakeout in the supply chain.Today, the economy has several stories to tell. Mike Wilson, the chief investment officer of Morgan Stanley, argues that we have been in a “rolling recession” for three years—an apt term, capturing the queasy, bewildering state of the financial world. Downturns have afflicted sector after sector, region after region, and many of these mini-busts resolved into mini-recoveries. The technology sector is flourishing as the housing market and manufacturing industry flail. Overall the economy has performed fine. Still, if a few more stories turn darker, the country might be in trouble.The shutdown won’t cause a nationwide recession, provided it is over soon. But it could certainly worsen some smaller ones already gathering force. Trump’s dismissal of 300,000 federal workers and cancellation of hundreds of billions of dollars of government contracts tipped the Washington region into a slump this year. The jobless rate has been flat in most large metro areas, but the D.C. area’s unemployment rate has jumped 0.6 percent; measures of financial distress, such as food-bank usage, have surged.If the Senate agrees on a spending bill and reopens the government quickly, the shutdown and furloughs won’t have much effect, Zandi told me. But “if the shutdown lasts three or four weeks, it becomes a deal for the economy, as government workers who aren’t getting paid pull back on their spending and government contractors lose business,” he said. If it lasts for more than a month, the shutdown could have a significant impact—directly on families, and indirectly as investors question “the ability of the U.S. government to do basic things like keep the lights on.”At the same time, the trade war has led to a minor downturn in the manufacturing sector, which has contracted for the past seven months and shed workers for the past two and a half years. The agricultural industry is also shrinking, thanks to the rising cost of labor and equipment and the falling price of commodity crops, though the Trump administration is angling for a bailout. Finally, the housing market is in a—well, I’m not even sure what to call it. The number of “starts,” or new projects that construction firms have broken ground on, is perilously low. Existing-home sales are dropping. Real-estate prices are falling. Lower interest rates and prices might help some borrowers, but won’t make much of a dent in the country’s severe housing shortage. The country’s GDP and stock market are performing well, though, thanks to a colossal flush of investment in artificial intelligence and related technologies. Companies are pouring hundreds of billions of dollars a year into data centers; investors are forking over money to start-ups and major tech firms, which are spending the cash on operating costs, model improvements, acquisitions, and hires. ChatGPT and its ilk are driving half of American GDP growth at the moment. And the tech boom (or bubble, perhaps) is buoying the country’s equity valuations and its electricity and utility sectors. [Rogé Karma: How bad would an AI bubble be?]At the household level, the unemployment rate remains low and income strong enough. But most companies are simply not hiring, meaning that jobless workers are spending much longer looking for a position. And though the jobless rate is not high, it is rising, climbing from a post-pandemic low of 3.4 percent to 4.3 percent. The country’s cost-of-living crisis shows no sign of relenting either. The APR on a credit card sits at 21.1 percent, up from 14.5 percent three years ago; mortgage rates are above 6 percent. And tariffs are jacking up the cost of consumer goods: The effective tariff rate is 17.9 percent, the highest since 1934, according to the Yale Budget Lab. The price increases are costing families $2,400 a year.Given these dynamics—plus the uncertainty afflicting businesses, plus the tenor of the political debate in Washington, plus soaring insurance premiums and pending health-care cuts—the public’s assessment of how things are going is plummeting. Consumers are “much less positive” than they were a few months ago, argues Stephanie Guichard of the Conference Board. A lot of people think the economy is already in a recession.Depending on where they are and what sector they work in, they might not be wrong. It may take some time for us to know for sure. While the government remains shut down, the Bureau of Labor Statistics and other agencies won’t publish data on hiring, inflation, unemployment, and other key metrics. Jerome Powell, the chair of the Federal Reserve, describes the overall situation as “challenging,” “turbulent,” and “curious”—not exactly the words you want to hear from the head of the country’s monetary authority.Washington has already put itself in a recession. Maybe the rest of the country is next.