It’s hard not to constantly think about the economy these days, what with inflation and tariffs everywhere. Are we heading into a recession? We examined the insights of financial experts, who reveal that some signs are hard to ignore. Here are six recession warning signs to watch for.
Are People Borrowing Less Money?
When people, and businesses especially, begin borrowing less money, it can be a key indicator that a recession is on the way. The good news, which is actually bad news that has been spun into a positive for this particular scenario, is that people are still borrowing money at a rapid pace. Household debt alone has topped $18 trillion, and credit card debt has reached a new record.
Are Businesses Slowing Down?
How are companies doing today? If people are spending less money in stores, business might be slow across the board. Inflation has hit a point where even Gen Z isn’t spending as much money, and if that’s not a sign…
Are Layoffs Running Rampant?
This one is never fun, but when layoffs increase, it’s a bad sign. And this year, we hit the highest number of layoffs since the pandemic began. Inspiring any confidence within you?
What Does Google Analytics Have to Say?
In a thread on the Economy subreddit, one user mentioned that an indicator of upcoming recessions can be found in Google search data for keywords such as “bankruptcy” and “unemployment benefits.” Google Trend data is free to explore, though the results aren’t always what we want to hear.
Data isn’t everything, though. This suggests that unemployment benefit searches have been steady, while other sources report high layoffs.
Has the Yield Curve Inverted?
When people lend money for a short period, they receive lower interest rates. Longer times yield a bigger reward, as the risk of being paid back is higher. When this “yield curve” inverts, however, that means lenders are worried. Luckily, the yield curve has not inverted.
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Are Companies Hiring?
While some industries remain stable and others rise and fall, it is impossible to predict the direction of all companies with certainty. However, companies have been shedding jobs and slowing down hiring, which are two telltale signs of bad things to come.
More Recession Stories From Cheapism
- 13 Recession-Proof Jobs That Don’t Require a Degree, According to Experts — Certain industries are much more recession-proof than others, and while some require significant training or high-level college degrees, not all recession-proof jobs require years of schooling.
- 15 Industries That Would Benefit From a Recession — Some industries have built-in mechanisms that allow them to survive, and even thrive, when economic storm clouds gather.
- 15 Things You Really Don’t Need to Buy During a Recession — From new cars to Netflix, here’s what to think twice about buying during a recession.
