Economic Indicators of a RECESSION
There are signs and you don't need a college degree to see them..
If you’re 30+, you know what this means and you actually lived through it at an age where you know what unemployment meant to your family. You know what foreclosure meant. You know about downsizing. The 2008 collapse set many families back YEARS.
Some people (like Ray Dalio) saw it coming. Most didn’t. So how can you accurately tell when a recession is near?… especially when you’re not a financial expert like Ray Dalio…
Street Level Recession Indicators You Can See In Your Day To Day Life
Nightlife quiets down: people that are outside every weekend start going out less and less and only go out for “happy hour” or “free” nights. Regular Friday and Saturday nights in places like NYC, DC, or LA are dead. The streets are not packed with people in and out of restaurants and bars. You can walk into a restaurant on a Friday night with a table of 6 and not have a wait. Strip clubs have little to no patrons and dancers are no longer making the big bucks like they used to. Resorts are empty, flights to warm destinations aren’t as packed, and less and less people are spending on things like cruises and all inclusive trips. On the opposite end of this, places that are generally free and empty are now packed. For example: your local park is usually pretty empty but now it’s full of families looking for free activities to kill time. If your friends usually meet up at happy hour or go out on the weekends together with a section and bottles, and now you guys spend more time having smaller cookouts and house parties, this is probably a sign of an oncoming recession. This leads into my next sign, ‘no new shit’ + ‘no stunting’.
No new shit: when the money is good and flowing, you will notice a lot of people buying expensive big ticket items like cars, homes, boats, et… people getting theaters installed in their house… people getting their “dream” backyards designed…new paint on the house… renovations they don’t really need but want.. when the money dries up, all of this stops for MOST people. They stop flying the family to the Bahamas for summer trips and instead they take a roadtrip to Florida at the most. Look at the consumers around you, they’re leaning towards older, fixer homes vs new construction. They’re not buying new cars, they really aren’t buying cars at all to be honest. Most people are opting to keep their old cars on the road and if they do purchase another vehicle, it is more than likely used.
No stunting: during the pandemic, when the money was abundant… everyone had expensive liquor, new clothes, watches like Rolexes were being talked about on the timeline, people were moving into luxury apartments like they cost $500/month to rent.. it was a glorious time. The stunting and flexing was at an all time high. If your neighbor just bought a new boat, you’re probably not in a recession. When he lists that boat on Facebook Marketplace for a considerable discount, it’s probably not a good sign.
Monthly hygiene/maintenance: Take a look around you, people are learning how to wash and cut their own hair. Men are opting out of $50 haircuts and growing out their hair OR learning how to do their own lineups. Women are switching to more natural looks and opting for twist outs and their natural curls over wigs and extensions. Even the natural hair girls are leaving the hair salons alone and learning how to do it themselves, even their own braids! Women are wearing ‘press on’ nails vs going to the nail salon and spending $100+ on manicures and pedicures. I know a lot of women personally that have stopped paying for waxes and are shaving again or using at home kits. I know a few women that have learned how to do their own hair as well.
Your vices at a discount: **a lot of people deny their vices but this is for my honest people**. Sex workers offering extreme discounts for content and meetups. Your drug dealer is offering discounts so cheap, you start to question if they’ve been picked up by the police. They’re basically giving it away, hungry for a sale. Think about every fast food place you know, they’re pushing these discount bundle meals down our throats. They send you coupons in the app every day. THEY’RE THIRSTY FOR CUSTOMERS. Check Disney and other theme parks = DISCOUNTS.
Eating Out Vs Packed Lunch In Office: This is a big one now that we have food delivery options like DoorDash and UberEats. When the money is low, people tend to pack their lunches. They know they are better off making a sandwich or reheating some leftovers from the previous night. When the money is flowing, people are a bit more comfortable spending $25 on DoorDash for a burrito at work. Just think about your own eating habits on payday vs the day before payday.
The fall of expensive gym memberships: It’s hard to save money and maneuver financially if you’re paying $200+ every month for yoga, pilates, and Orange Theory classes. I personally know a few people that have dumped all of that and just gone back to a basic membership at Crunch, La Fitness, or Planet Fitness. $20-$40 a month > $150-$250 for a boutique fitness club. People are also dropping their personal trainers (and chefs) they hired previously in the financial boom.
Slowdown in retail: a lot of sales (going out of business sales), deep storewide discounts, things that would have cost you an arm and leg previously are now cheaper than ever.
Massive layoffs and hiring freezes: The first thing companies do when they are bleeding money is CUT BACK. They tend to pour over their numbers and see where they can cut back. This includes people, supplies, things they’re paying for like software and employee computers. When people are let go/fired, expect unemployment numbers to go up. High unemployment = the market is NOT doing good.
Financial stress on individuals, families, and businesses: people having less money makes them agitated, and more likely to take risks to get more money. Businesses will have risky business practices, individuals will take more risks like stretching out the time between oil changes or skipping dentist appointments because it will break the bank. Always be on the lookout for signs like this. Balding tires. Tape on a broken window. People making things stretch that they would easily replace before.
More vacancies in real estate in commercial and residential space: More and more houses on your street with “for rent” or “for sale” signs. Apartment complexes dealing with a lot of vacancies. People just not being able to live on their own. The rate of people accepting roommates goes up. People in their 30s moving back home with mom or dad or moving in with siblings. Whole families deciding to live together in one house (my parents did this with my godparents when I was like 1. They split bills, childcare, and food).
To sum it all up, it’s not about what the government is telling you on the news. Most of those people are out of touch with real reality. They don’t live in the same neighborhoods you do and don’t deal with the reality you do. YOU can see things clear as day in your own community and life to make your own assessments. STACK ON.