How to know which recession indicators are real

Nowadays, almost anything is #reastionIndicator on social media. Duncan Donuts Opening in Boston? Recession indicator. The return of the Ice Bucket Challenge? Obviously, that’s one too.

Hanging humor is a coping mechanism, and I know it well. The memes of the recession may be a bit like a cultural epochist, but below, there is real anxiety about the economy. Support for the huge storm doesn’t seem to be so ridiculous when more people rely on credits for basic necessities like groceries.

This week, we got more indicators: the U.S. economy fell 0.3% in the first quarter, GDP’s biggest decline since 2022, with weekly unemployed claiming to soar to 241,000, an increase of 18,000 from last week. President Donald Trump’s tariff agenda and austerity paved the way by raising the prices of consumer goods, shaking the stock market and raising widespread consumer pessimism.

Some economists say things are not That Not good, at least based on formal indicators. But for most of us, the fear of a recession is not complete with the formal start and end date. Warning signals – loss of work, higher budgets, overall uncertainty – usually cause panic early before consensus is reached.

Your financial situation is more than just an atmosphere.

What we experience in our bones often conflict with official economic data. It explains why we look for cultural trends like the Swing Index (historical correlation between skirt length and economic conditions) or lipstick index (the sales of lipsticks during economic downturns) to understand what is happening now.

To prepare for the future of the economy, we cannot rely solely on traditional facts and numbers that are “hard”. We need to consider real-time “soft” subjective indicators, feelings and explanations.

Official recession indicators

If you ask most economists to define a recession, they usually refer to long-term declines in key data points, such as economic growth, employment, and consumer spending. These trends can blend in with each other, making the decline worse.

Subjective recession indicators are important

GDP and employment are backward numbers and do not always understand the economy accurately. James Galbraith, a professor of economics at the University of Texas at Austin, said that recession subjectively is determined by the National Bureau of Economic Research and usually does a good job after the facts.

One example: While prices are not as fast as they were a year ago and unemployment remains low, Trump’s dazzling economic agenda has also driven the most pessimistic consumer outlook since 2011.

Soft metrics, like how people spend money and manage debt, don’t immediately appear in hard data. However, this subjective indicator – how companies and people feel about the economy – can achieve and affect the situation of the macroeconomic.

Additionally, fear and anxiety affect behavior. When headlines talk about uncertainty, businesses cut and household purchases less, resulting in a decline in retail sales. When household income is unstable, loan defaults increase, resulting in greater economic instability.

“Our economy operates in terms of people who buy things and get services. If people are either unemployed or slow down because they are worried about unemployment, it snowballs down job opportunities.”

Furthermore, there was some recession trend in smaller pockets before impacting the wider economy. “Even if we have a slight recession, some workers are more likely to be hurt than others,” Gould said. For example, black workers always experience twice the unemployment rate, so any downturn will be affected. “There is no mild recession in marginalized groups,” Gould said.

What the recession meme tells us

Not every meme is a metric. Local bagel shops advertise “free water” to predict insufficient recession, but there are many warning signs that the economy has acidified.

Our spending is different

When people are upset about the recession, they tend to reduce spending and be cautious about their money.

➡People think twice before thinking about buying a house. In March, about 52,000 home purchase agreements were cancelled, more than 13% of all accepted offers.

➡ The dollar tree attracts more shoppers from all income groups. Transport and spending increased compared to last year, the latest earnings report from budget retailers shows that as more consumers look for cheaper options.

➡ “The core of insufficient” is popular. Tiktok creators are showing off smaller wardrobes, smarter budgets and “no purchases” challenges to prepare for tough times.

We rely on credit

Relying on credit to cover daily necessities points out that living costs are high and lack of disposable income.

➡25% of consumers use “buy now, pay later” for groceries. Installment plans are increasingly covering food delivery and groceries, rather than just financing large purchases.

➡ More and more people are lagging behind their credit card bills. The percentage of credit card accounts that delay payments for more than 90 days reached a new peak, indicating signs of consumer distress.

Companies are cutting costs

Cost cuts, widespread layoffs and fewer job opportunities are signs that companies focus on protecting profits rather than investing in growth.

➡Southwest Airlines will end its long-term free check bag policy. Companies look for ways to save money by cutting such privileges.

➡After laying down 12,000 jobs last year, United Parcel Services plans to lay off 20,000 jobs this year. UPS CEO Carol Tomé cited uncertain economic environment as a key factor in company restructuring.

➡ Law school applications increased by 20.5% compared with last year. Historically, law schools were seen as safe refuge when the economy was shaking and the job market dries.

Planned economy is in a downturn

In my book, dark humor is always welcomed during times of economic stress. However, experts recommend taking practical practical steps before the economy deteriorates.

1. Assess your finances: Check out your income, expenses, savings and debts to get a clear picture of your current financial situation.
2. Establish financial buffering: Create an emergency fund in case you lose your job, designed to cost living at least three months.
3. Preparing for changes: Update your resume now, network and learn new skills to mitigate potential transitions.
4. Long-term investment: During a market decline, don’t panic and sell investments; the market tends to recover.
5. Resolve high interest debt: Prioritize debts with the highest interest rates (but make sure to build your emergency fund first).
6. Strengthen your support network: Connect with friends, family and local community resources to get potential assistance and emotional support.

Recession has no template

Every historical recession is unique. Unlike the last two major economic downturns, Gould said the 2025 recession is not a product of a financial crisis or pandemic, but an impact of government policies.

The Trump administration cuts federal funding, threatening to severely undermine the country’s fragile social security network. Cutting measures to cut Medicaid and Supplementary Nutrition Assistance Program (SNAP) will have a particularly destructive impact on low-income households.

The shrinking volumes of welfare, housing assistance, health services and food aid have a ripple effect, thus increasing economic hardship across the board, as middle-income households have fewer resources available.

Even if the recession officially ends, this will not immediately translate into recovery for most families. The scars of unemployment, exhausted savings and financial insecurity can take months or even years to recover, especially within the depths of the recession.

“The impact depends in part on the speed and scale of government actions to stabilize the economy,” Galbraith said.

Until then, we will continue to focus on social media trends, trending trends and jokes that make us feel better.

More information about today’s economy