6 Indicators of a Potential Recession

It seems that in the media today there are more and more mentions of the dreaded R-word: recession. With growing economic uncertainty, the threat of potential recession seems to be growing as well.

Many people today remember the 2008 financial crisis and the impact it had on financial markets. Markets fell more than 50% from their pre-crisis highs, and many Americans saw their savings wither away.

No one wants to relive those days, but if a recession occurs, there’s no getting away from it. Discussion of recession indicators has even spread to social media, that’s how much fear of recession has become mainstream.

But while social media discussion of recession indicators can often take a humorous tone, there are real recession indicators that could be flashing warning signs of impending crisis. Here are a few potential recession indicators to keep your eye on.

1. Rising Credit Card Delinquencies

The US economy is driven by consumer spending, so anything that negatively impacts consumers could also negatively impact the economy. Right now rising credit card delinquencies could be indicating that consumers’ spending power is tapping out.

Credit card delinquencies have been rising steadily for the past several years, and 30-day delinquencies in fact are at the highest level in over a decade. 90-day delinquencies are up too, at all-time record highs.

Those aren’t good signs, and the article by Juan M. Sanchez and Masataka Mori dated May 9, 2025 entitled: The Broad, Continuing Rise in Delinquent U.S. Credit Card Debt Revisited for The Federal Reserve Bank of St. Louis probably sums up the problem best:

“The percentage of people who are delinquent on credit card debt measures the incidence of financial distress among U.S. households, and it is important for understanding how macro shocks affect the economy. In addition, delinquency rates, including credit card delinquency rates, may anticipate recessions and provide insight into future U.S. economic conditions.”

It isn’t just consumers who are impacted by this, but businesses too. From the banks that issue credit cards to the businesses that sell consumer goods, growing consumer financial distress can impact the entire economy.

2. Falling Consumer Confidence

Another potential recession indicator is falling consumer confidence. According to the Conference Board, the most recent reading of consumer confidence fell to 54.4, well below the level of 80 that would ordinarily signal a recession ahead.

This is the lowest reading since May 2020, demonstrating the pessimism that is pervasive among American consumers. Consumers who don’t have confidence in the health of the economy aren’t likely to spend money, which could cut back on economic growth.

The link between consumer confidence and recession is one that has been much discussed and speculated about over the years. And it appears that there is at least some evidence that consumer sentiment can play a role in what happens in the economy.

3. Job Cuts

One of the characteristics of recession is that unemployment tends to rise. So when companies start to cut jobs, that could be one indicator of a potential recession on the horizon.

While the unemployment rate today is slightly higher than recent lows, it hasn’t started pushing up significantly yet as in previous recessions. But if you look at the unemployment rate data, the unemployment rate doesn’t start really rising until the recession is underway, and normally peaks at the end of or shortly after the recession.

That’s why looking at companies that are cutting jobs could be an indicator of a coming potential recession. Right now a lot of companies are cutting jobs, with Microsoft cutting 7,000, UPS cutting 20,000, and Chevron cutting 20% of its workforce.

4. Falling GDP

Falling economic growth is often an indicator of recession, and recent gross domestic product (GDP) data isn’t looking too rosy. GDP fell 0.3% in the first quarter of this year, versus the 0.8% gain that most economists had expected.

That 1.1% miss was largely chalked up to tariff front-running, as companies hurried to get goods and inputs imported before tariffs kicked in. Where GDP will go from here is unclear, as a lot may end up resting once again on the impact of tariffs on the economy.

5. Fast Food Business Down

We’ve talked previously about how consumer spending drives the economy and how consumer sentiment can help impact recessions. Now there is some more concrete evidence of shifts in consumer spending patterns.

McDonald’s has recently seen its biggest drop in same-store sales since 2020, and it’s not alone. Numerous other fast food establishments saw weaker than expected sales.

Across the industry, traffic from lower- and middle-income households was down double digits, and only traffic from households making over $100,000 a year showed continued strength. Will consumers continue pulling back on this kind of discretionary spending in the 2nd quarter of the year, and could this be another indicator of potential recession?

6. Global Shipping Grinding to a Halt

The last concerning indicator we’ll look at is the slowdown in shipping. It isn’t just shipping from China to the US that has come to a grinding halt in the aftermath of Trump’s tariffs either.

Exports to China are down significantly too, down 37% year on year. And it’s not just shipments that are down either, as shipping capacity has fallen by double digit percentages as well.

Many economic historians remember the aftermath of the Smoot-Hawley tariffs, which led to a downward spiral in world trade and made the Great Depression even worse. While it’s still too early to assess the impact of Trump’s tariffs, if they lead to a trade war, could that end up being Smoot-Hawley 2.0?

Help Protect Yourself Against Recession

Many people today are starting to fear a potential recession, and they’re looking for ways to protect themselves against that possibility. Fear and uncertainty are growing, which is helping to drive safe haven buying, including for precious metals like gold.

Gold has served as a safe haven for centuries, and is one of the most trusted assets people look to when trying to safeguard their wealth. Thanks in part to that safe haven buying, gold prices have hit record highs this year, and many analysts believe that the gold price could push even higher in the future.

Many people today have been looking at gold IRAs as one vehicle with which to buy gold. Gold IRAs function the same as any other IRA, only that they own physical gold coins or gold bars rather than conventional financial instruments such as stocks or bonds.

With a gold IRA, you can take advantage of gold’s potential benefits, such as portfolio diversification and inflation hedging, while maintaining the same tax advantages as any other IRA account. And in most cases you can fund your gold IRA with a tax-free rollover from your existing 401(k), 403(b), TSP, IRA, or similar retirement accounts.

If you’re worried about what the future holds, and looking to help protect your hard-earned savings from potential calamity, maybe it’s time to start thinking about gold.

Goldco has helped thousands of Americans benefit from owning gold, and with over $3 billion in precious metals placements and over 6,000 5-star reviews, we have worked hard to become one of the best and most trusted gold companies in the country.

With so many possible recession indicators flashing warning signs, now is the time to start thinking about how you can help protect yourself against the possibility of recession. Call Goldco today to learn more about how gold could help you do that.