U.S heading for a recession? Top weird indicators that signal a recession

Amid current financial uncertainty, both investors and consumers are wary of a potential recession. Despite the guidance of indicators such as the inverted yield curve and the SAHM Rule, which are currently flashing red, predictions about economic downturns have been imprecise recently.

What could be the pending economic issues?

Peter C. Earle, a senior economist at the American Institute for Economic Research, highlights that while informal indicators may not be conclusive on their own, their combined occurrence can point to broader economic issues. One such indicator is the “Lipstick Effect,” which posits that increased lipstick sales signal economic downturns. This theory suggests that as consumers cut back on big-ticket items, they opt for smaller, affordable luxuries like lipstick. Similar trends can be observed in sales of items like nail polish, reflecting shifts in consumer behavior during tough times.

The “Stripper Index” offers another unusual economic indicator. This theory suggests that reduced tips for exotic dancers may indicate broader financial difficulties, as people cut back on discretionary spending. This index mirrors trends seen in other service industries reliant on tips, such as restaurants.

Is dating app usage increasing the economic strain?

An increase in dating app usage can also signal economic strain. During prosperous periods, people tend to meet potential partners through in-person activities. However, during downturns, dating apps often see higher engagement as people seek less expensive ways to meet others, a trend noted during the 2008 financial crisis.Business disputes and insolvencies are also prevalent in recessionary periods. Increased conflicts among business partners and a rise in corporate bankruptcies—up 30% from 2022 to 2023—can indicate financial strain. Law firms often report more business disputes during economic downturns.

FAQs:

Could America be on the verge of a recession?
America is currently heading towards a probable recession, if reports and analysis of economic experts are to be believed. What are some of the indicators of recession?
Some of the major indicators of recession in the US, involve the yield curve and the SAHM rule, both of which are very important factors in the US economy.