Recession warning signs to watch: Goodbye lipstick, hello Hamburger Helper
No, Coachella’s lineup dropping months earlier than its usual release isn’t actually an indicator of an impending recession. But in the absence of official government data, social media users are casting about for hints — even music festival-related ones — about the true state of the American economy.
The United States is not in or even near a recession, despite what your grocery bill feels like. But the economy is in an uncertain place, with a number of signs of weakness that economists are monitoring.
For years, one of the best-known recession indicators has been the “lipstick index,” which posits that Americans stock up on cheaper feel-good makeup when times are tough. That one might be outdated — or at least different now — partly because of the popularity of skin care spending and changing consumer habits.
Here are some economic warning signs experts say to watch for.
Cardboard box production
Cardboard boxes power the consumer economy. They not only bring joy in the form of online shopping purchases, they are literally how retailers move goods. When cardboard box production slows, it could be a sign that people are expected to buy less in coming months. And cardboard box production is down.
“It’s giving a signal that retailers are expecting fewer products to sell, so the distributors are not ordering as many boxes,” said Jadrian Wooten, an associate professor at Virginia Tech’s economics department.
Box-makers have shuttered several mills this year, reducing capacity for the material. Analysts point to a variety of factors: International demand for U.S. containerboard has weakened, people are moving homes less, the boom in box shipments during the pandemic has dropped off and consumers are watching their spending.
“The cost of many essential items continues to go up, which is crimping many Americans’ disposable income,” said Adam Josephson, a longtime packaging analyst who now publishes a newsletter about consumer spending.
Consumer spending is still strong this year, rising in August for the third straight month. But much of that spending is concentrated among the richest Americans, while low- and middle-income families are increasingly cutting back.
Hamburger Helper is back
Hamburger Helper sales have bumped up significantly this year, according to parent company Eagle Foods, as people seek out deals on groceries. For decades, people have turned to the packaged pasta-and-seasoning meals when times are tight — or, as social media users have been embracing this year, “struggle meals.”
Since prices soared in 2022, after the early years of the pandemic, American shoppers have increasingly been looking for ways to cut down on their weekly grocery bills. Grocery prices have risen nearly 30 percent since early 2020. That’s given boosts to discount grocery companies like Grocery Outlet, Aldi and Walmart. It could also be the reason that frozen pizza sales are rising, as people eat at home to save a few bucks.
Even higher-income shoppers are going to discount stores more and more, said Neil Saunders, global director at retail analytics firm GlobalData. In the past four years, the share of shoppers at all income levels who frequent the stores has increased.
People are concerned about the economy as a whole and are trying to save for potential downturns, Saunders said.
“People hear there’s a tougher economy, and they think, ‘We should be being savvy, we should be being careful and cautious about our spending,’” he said.
Sales of big trucks are slumping
Sales of huge trucks have been falling this year. We’re not talking about America’s darling, the Ford F-150s, but huge semi- and similar trucks — the type that are meant to move goods and supplies around the country.
If there isn’t as much demand for those big trucks, that signals industrial activity could be slowing. A steep drop-off in sales has often preceded recessions.
Some of the sagging sales in heavy trucks could be because the industry added too much capacity in the years since 2020 as consumer spending on goods boomed in the early pandemic months, said Ken Vieth, president and senior analyst at ACT Research.
Heavyweight trucks are also facing a new hurdle after President Donald Trump announced last month that a 25 percent tariff would be applied to heavy trucks imported into the country.
“If there’s a silver lining to this, it’s that the trucking industry has been swimming in overcapacity for three years now,” Vieth said. “The first step to solving a problem when you’re in the bottom of a hole is to stop digging.”
Thrifting is in
Browsing and buying at thrift stores has gotten steadily more popular in the past few years, partly to save some money and partly to score luxury goods at low prices. That shopping has boomed this year, fueled by shoppers seeking budget deals.
ThredUp, a popular app where people can sell their used clothing, posted a 16 percent boost in sales during its second quarter of the year. Similar apps have seen a bump as tariffs start to take hold, making it more expensive to buy some new clothes and accessories.
Sites like ThredUp and Poshmark can also be a way for shoppers to bring in a bit more cash by selling their used clothing.
The trend points to the anxiety hanging over consumers as the economic outlook remains unclear. Consumer sentiment, a closely watched economic indicator measured by the University of Michigan, has fallen more than 18 percent this year.
“Consumers are just becoming more savvy about what they spend and where they spend, and there’s a much greater emphasis on spending carefully,” Saunders said.
No more job hopping
Americans are feeling stuck in their jobs, as the number of job openings in the country stays stubbornly low. Hiring has slowed to a crawl this year, with employers adding 88,000 jobs during the summer.
The rate of people quitting their jobs is at the lowest level it’s been since the pandemic-fueled recession of 2020. That suggests that people are unable to find new positions or reluctant to risk a move in an uncertain labor market.
“Job-switching is so fundamentally important to an economy’s health,” Allison Shrivastava, an economist at Indeed Hiring Lab, told The Washington Post last month. “You really do need churn: That’s the best way for workers to get better wages and to move labor where it needs to go. Right now we’re in a stagnant place where people can’t progress in their careers.”
Still, the labor market isn’t all dreary news: The unemployment rate nationally remains at a relatively low 4.3 percent, and unemployment insurance claims have fallen since the beginning of the year.
Home equity loans up; residential building permits down
Home renovations are popular this year, with home equity loan originations jumping 12 percent during the first quarter. As home values have risen, people are borrowing against their most valuable asset.
One of the main reasons to take out a home-equity loan is to remodel your home, an option people are turning to this year because it is expensive and difficult to buy a new home, with mortgage rates still elevated and new homes stagnant on the market. People also take them out to lower their overall debt interest rates.
“Home improvements and debt consolidations are the top reasons,” said Linda Bell, home equity analyst for Bankrate. But she cautions that the loans, though they may be accessible, are types of second mortgages, and it can be tough to assume extra costs.
Buying a new home may not get dramatically easier anytime soon — new residential building permits were down 11 percent in August compared with last year, a traditional warning sign for a possible recession.
“That’s one indicator signaling we’ve got a problem,” said Mark Zandi, chief economist at Moody’s Analytics, referencing building permits. “But in this case, I think it suggests a tough economy but not recession.”
What readers are saying
The comments reflect a widespread perception of economic hardship, with many attributing it to current policies and leadership under President Trump. Indicators such as increased reliance on cheaper food options like Hamburger Helper, rising prices, and reduced truck traffic are... Show more
This summary is AI-generated. AI can make mistakes and this summary is not a replacement for reading the comments.
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