"If you’ve been quietly replacing brunch outings with breakfast at home, feeling a little too excited about what you can buy at the dollar store, or seeing too many on-the-nose memes about funny recession indicators, you might be picking up on something bigger: a shift in the economy. While economists like to use formal metrics like Gross Domestic Product (GDP) and employment rates to gauge the health of the economy, everyday habits—like swapping designer brands for generic or googling “pantry meals” more than usual—can signal the same thing in real-time.
While there are many alarming pop-culture and fashion parallels between now and the last recession, the return of bubble hems isn’t exactly an accurate indication that a recession is near. However, there are some very interesting and shocking signs to be aware of, in addition to traditional recession indicators, including an increase in lipstick sales and a decrease in underwear sales. (Yes, really!) Ahead, I’m diving into some of the traditional signs of a recession and the quirky, but oddly accurate, ways it can show up in our lives.
10 recession indicators you should know about
1. A decrease in GDP
GDP is a monetary measure of the total market value of all goods and services produced within a specific period. When times are booming, GDP is high as people and businesses buy and spend more freely. People want to purchase, and companies want to produce—it’s a win-win! However, when those businesses and consumers start to pull back on spending to tighten their budgets in response to harder economic times, the GDP decreases. When GDP shrinks for two consecutive quarters, economists officially ring the recession bell (so far, the GDP in the U.S. decreased by 0.3 percent in the first quarter of 2025). A smaller GDP signals that businesses and consumers are reconsidering their finances by spending less, producing less, and—in many cases—earning less.
2. An increase in small cosmetic purchases
Coined by Leonard Lauder of the Estee Lauder Company and recently the topic of a viral TikTok video, the lipstick index offers an example of how consumer trends are impacted by the economy (and vice versa). The lipstick index claims that when a recession is looming, consumers will turn to smaller “everyday luxuries” like lipsticks and nail polish to get their shopping fix over bigger ticket items like clothing and purses. I’ve definitely been leaning toward smaller purchases as ways to treat myself, as news of ongoing layoffs, hiring freezes, and declining interest rates seems to be everywhere, and so have many of my friends. While it seems like a small change in consumer spending, don’t look the other way if you start to notice more drugstore makeup hauls on TikTok, as it could mean something bigger is happening economically.
3. An increase in pizza sales
In a similar, but much tastier vein, pizza sales data is looked at as an indicator of how the economy is doing. When times are great, people like to go out and try new restaurants and bars in their cities, spending a night on the town at the end of a long work week. However, when things get a bit tighter, people shift to buying less expensive food that they can order in, like pizza, as a reward for a long week in the office. Sales for frozen pizzas and other easy-to-prepare entrees tend to shoot up around tougher economic times, especially since they can be easily bought on sale and stored in bulk. Honestly, I love a good frozen pizza when I can’t be bothered to figure out what to make for dinner, so you’ll catch me with a few pizzas on my grocery list this weekend.
“Don’t look the other way if you start to notice more drugstore makeup hauls on TikTok… It could mean something bigger is happening economically.”
4. A decline in underwear sales
Have you been feeling like you should defer buying boring clothing items in favor of more impactful garments? If so, you can consider yourself in good company these days. Turns out sales of underwear and other “invisible” items like socks and tights tend to decrease as people get more frugal during tough financial times, especially for men. Who needs to replace those old undies with the hole in them when you would get more bang for your buck buying that new dress for work that makes you look and feel a lot more confident? While I’m a huge advocate that sexy underwear helps you feel better overall, I can totally see why new lingerie might be the first thing to go when you need to cut back on your clothes budget. I wonder if this means sales of bulk underwear from Costco tend to go up around this time, too??
5. An increase in secondhand shopping
It turns out that shopping secondhand is also a really great recession indicator. Not surprisingly, people tend to reduce their shopping in traditional stores and turn to thrifting, Facebook Marketplace, and consignment options as a way to save money (and it helps the environment—win-win!). In a recent survey by Smarty, 50 percent of respondents said they’re planning to consider secondhand alternatives instead of traditional shopping in the coming months. A slower economy also means there will likely be more items available at secondhand stores since more people bring in their things to sell to make money. With all this in mind, you can catch me venturing to my local shops regularly.
6. Reduced consumer spending
When you strip away all the quirky recession indicators of lipstick sales, pizza cravings, and thrift store hauls, they all point to one thing: people spending less. And that’s something the government keeps a very close eye on. When uncertainty is high, most of us cut back on the extras and look for cheaper ways to cover the basics. In the first quarter of 2025, overall spending held relatively steady, but areas like travel and discretionary purchases saw notable dips, according to McKinsey & Co. Because really, who’s splurging on the latest iPhone or a new wardrobe when you’re just trying to stay financially afloat? Since consumer spending drives a big chunk of the economy, these slowdowns can ripple out and affect business growth, hiring, and even job losses.
7. A decrease in industrial demand
If you think about it, the economy is really just one big ongoing cycle, and demand is what drives production (should I change my career to become an economist yet?). If demand is down, production also slows, and that can lead to job losses and further reduced spending for those impacted. So far this year, overall industrial production is down about 0.3 percent across the board. This is especially true for areas like the automotive industry, technology production, and appliances. Since these are big-ticket items, people tend to wait until things are looking better to buy them or buy them secondhand if they need them sooner.
“Sales of underwear and other “invisible” items like socks and tights tend to decrease as people get more frugal during tough financial times.”
8. A rise in unemployment rates
I couldn’t get through an article on the economy without touching on rising unemployment rates. In today’s day and age, getting laid off is often just part of a career trajectory (two-timer here, reporting for duty!), and we likely all know someone who’s been affected. As GDP decreases and everyone pulls back on spending, companies also tend to tighten their belts and reconsider their employee requirements. If you’ve recently been impacted by a layoff, the good news is that you’re far from alone: The unemployment rate has been hovering around 4.2 percent (compared to 3.65 percent in 2023 during the heyday of the “Great Resignation”) and is predicted to stay consistent or even increase in the back half of the year. If you’re looking for work right now, the good news is that it’s possible to land a role during a slower hiring cycle, so don’t let unemployment news discourage you.
9. A decline in the housing market
A significant factor that economists consider when assessing the state of the economy is housing trends. Home sales and new housing construction often slow down when economic uncertainty rises. People tend to hold off on major decisions, like buying a house, when they’re unsure about things like interest rates or job security. And that’s exactly what we’re seeing right now. A slower real estate market also has ripple effects on other industries, such as furniture sales and renovation services. The upside? If you’re in the market for a new home and feel confident about your situation, a slower real estate market might help you find a great deal on your dream place!
10. An increase in DIY trends
If you’ve been meaning to try your hand at DIYing, it turns out that an economic downturn might just be the motivation you were looking for to finally dye that old dress a new color or fix that wonky board on your deck. From sewing buttons to painting furniture, DIY solutions have become a trendy, practical, and often fun way to save cash during tougher economies. Fixing what you already own instead of spending money on a brand new item or paying someone else to fix it for you makes way more sense in economic uncertainty. Whether this inspires a new hobby or encourages you to start a side hustle for extra cash, you won’t be alone in the slightest. As a matter of fact, Forbes says that an increase in DIY businesses is a recession indicator in and of itself.
So, are we heading for a recession?
Economic cycles are almost impossible to accurately predict, but I won’t sugarcoat it: Some of these recession indicators are concerning. For example, the first quarter of 2025 is the first time we have seen a decrease in GDP since the first quarter of 2022, which is largely being attributed to tariffs going into effect. Consumer sentiment and spending are also fluctuating, and the housing and job markets aren’t looking too hot either. With all this in mind, expecting an economic downturn to be on the horizon is not uncommon right now. However, experts aren’t so quick to jump to conclusions, and some of their concerns are even cooling down in Q2. For example, JP Morgan Chase recently reduced their expectations of a recession from 60 percent to 40 percent in light of trade tensions easing temporarily.
In this case, it feels like our inability to predict the future is both a good and a bad thing. On one hand, we want to be as prepared as possible for economic downturns, but on the other, knowing the future could set us up for panic, stress, and rushed financial decisions. The good news is that whether you’re keeping a close eye on the news, hopping on lipstick or DIY trends, heading to the thrift store, or looking at Zillow wondering when to buy, you remain in control of your finances. Small adjustments to your budget, being on a first-name basis with your financial advisor, and rethinking your spending really can go a long way in helping you feel like you have control, even in an unsteady and uncertain economy.
Devin Cleary Gooden, Contributing Finance Writer
Devin is a Toronto-based content creator and marketer with 10 years of experience writing about finance and career tips for women. She is passionate about helping women understand finances so they can create the life they want to have, whatever that may look like. She is currently a senior manager of content at a fintech company, where she works on websites, emails, social media, videos, and podcasts.
Feature graphic images credited to: Cora Pursley | Dupe, Chloe Christianson | Dupe, Cora Pursley | Dupe, Kelly McQuillen | Dupe