By Denise Calderon, April 22, 2025
People who use social media platforms like TikTok have been sharing their struggles and predicting a recession based on everyday necessities that have become more expensive and inaccessible, such as groceries. Some have even made videos sharing their recession meals which will consist of very cheap items they buy to make a meal at home that is deemed affordable in today’s financial climate.
According to Hien Nguyen, assistant professor of economics at Cal Poly Pomona, a recession can be defined as a “significant decline in economic activity spread across the economy, lasting more than a few months.” Nguyen said recessions are usually caused by unexpected shocks, such as pandemics or wars.
Since concerns about a recession have been circulating on the internet, it was important to examine the warning signs to see if there are reasons to be concerned. Here are five indicators that an economic downfall may be approaching:
Rising cost of goods
The price of everyday necessities exponentially increasing — aka inflation — can be a solid indicator a recession is coming.
When the price of items begins to increase, the amount of spending will decrease, which negatively impacts the economy, according to Rosenberg Research. When there are drastic changes in prices, it results in an increase of money for producing those goods, which is an indicator of an economic downfall, according to the International Monetary Fund.
This is an indicator most people begin to feel early on as they notice the price of groceries and services are rising while the pay stays the same. Some of the groceries items that have been increasing a lot are coffee, eggs, and milk according to CBS News. The price of coffee in 2020 was about $4.33 and now in 2025 it has risen to about $7.39. The same thing goes for a dozen eggs and a milk carton. A dozen eggs in 2020 were about $1.53 and now they are almost $7. A single milk carton goes for about $4 while in 2020 it was about $2. Kaylee Tatengo, an economics student at CPP, spoke about how she feels about the impact of price hikes on everyday goods.
“For me, grocery shopping has been a major personal indicator that something isn’t right with the economy,”Tatengo said. “I’ve noticed that the cost of even basic items like eggs, bread, milk and produce has gone up noticeably in a short amount of time. What used to be a normal grocery run now feels like a much bigger hit to my budget.”
These price increases are associated with the new tariffs President Donald Trump has put on imports, which puts the United States at bigger risk of a recession, according to Forbes. Tariffs are taxes placed on goods imported from other countries. Trump placed a 10% tax on goods, which will raise prices for all products not manufactured in the United States, according to the BBC.
Real GDP declines
According to Nguyen, economists view a decline in the real gross domestic product as an early indicator of an oncoming recession. GDP is defined as the total market value of goods and services, according to the Bureau of Economic Analysis.
Usually, when there is a decline of GDP for two consecutive quarters, it’s a clear sign a recession is coming, according to the International Monetary Fund. A decline in GDP means there is usually lower consumption, incomes are falling and people are having lower standards of living, according to the International Monetary Fund.
Tatengo said jobs becoming less stable and other signs of the GDP decreasing could result in a possible recession. Especially, considering that major companies such as Google, Warner Brothers and CVS health corporation have started layoffs in April according to Newsweek.
“I’ve seen more conversations online and in real life about job layoffs, hiring slowdowns and companies cutting back on spending,” Tatengo said. “It’s especially noticeable when big, well-known companies start laying off employees . That feels like a sign that something is shifting in the economy. These changes, combined with the general anxiety in the media, make it feel like a recession might really be approaching.”
Unemployment rates rising
According to the , when there is a high unemployment rate, that means there is macroeconomic slack as opposed to a low unemployment rate, which is a signal of a healthy economy.
According to Nguyen, unemployment and job losses happen mostly when the demand for labor decreases due to economic downturn, restructuring and technology.
“If you get laid off, you don’t have an income and have to look for a new job,” Nguyen said. “Finding a job in a recession is very challenging. If you still have a job, you might have to take a pay cut, furlough, reduced benefits and no pay raises. Corporate perks, such as parties and retreats, are cut back.”
Juan Gomez, a political science student at CPP, is personally concerned with this potential indicator. He works in education, a field in which many are facing job cuts and losses due to an executive order signed by Trump to dismantle the Department of Education.
“It’s scary working in education right now,” Gomez said. “The Department of Education is being viciously attacked by the (right-wing), and there has been little to no impedance to this, something that is alarming for me.”
This hasn’t only been a concern for people like Gomez, who work in education, but also for other students who’re in the midst of graduating and may be going into an unpredictable job market. Tatengo explained her concerns with job hunting after graduation during a possible recession.
“Entering the job market during or right after a recession could mean fewer job openings, more competition and possibly lower starting salaries,”Tatengo said. “It’s stressful knowing that even after working hard to earn a degree, finding a job might not be as straightforward as I hoped. I’m also aware that companies may tighten their budgets during a recession, which could lead to hiring freezes or layoffs.”
Currently a lot of industries are facing bigger unemployment rates compared to a year ago. For example, Nonagricultural private wage and salary workers had 5,201 people unemployed in March 2024 and as of March 2025 the amount of people unemployed has risen to 5,567 according to the U.S. Bureau of Labor Statistics. Those who work in computer and electronic products have seen an increase in unemployment as well from 13 people in March 2024 to 29 in March 2025. Real estate has also seen a drastic change from 2024 to 2025 with 63 to 110 people unemployed.
Consumer sentiment
Consumer sentiments are used to assess how the economy is doing based on how people feel about the conditions of their finances, according to Britannica. This can be a clear indicator for a recession, because if people are not feeling confident about their finances and are struggling, that can be a sign the economy is not doing well.
People have been sharing unusual indicators on TikTok that show how consumer sentiment may be decreasing. For instance, Bloomberg Originals posted a TikTok video f focusing on out of-the-box signs that point to a recession, such as men buying less underwear and parents changing their kids’ diapers less often.
Currently, consumer sentiment has plunged down to 11% from March, according to a recent study by the University of Michigan. This has caused concern, seeing as sentiments have already decreased 30% since December 2024. Consumers have expressed their concerns on multiple worries, ranging from personal finances to incomes to business conditions.
Nguyen said students could face their own decrease in sentiments in the face of an economic downfall on the horizon.
“Students have a harder time borrowing money for college and finding a part-time job, “Nguyen said. “Students at public universities might have larger classes, fewer choices, and fewer resources on campus due to the state’s budget decline in a recession.”
Long-term Treasury yield spread increases
The long-term yield spread is the difference between the 10-year and two-year Treasury Constant Maturity rates — the interest rates on U.S. Treasury securities based on the maturity period — according to Nguyen. This is an indicator used by economists in order to gauge the health of the economy.
The yield curve has an effect on those interest rates and their fluctuation.
“Yield curve measures the difference between interest rates on long-term bonds and short-term bonds, “Nguyen said. “Naturally, rates on long-term bonds should be higher than those on short-term bonds, because investors need to wait longer to cash out their bonds for long-term, thus facing a higher level of risks.”.
Nguyen explained how this causes a recession and why the changes in the curve could be dangerous for the economy.
“During uncertainty, rates on long-term bonds can fall below those on short-term bonds, causing the curve to be ‘inverted,” Ngyuen said. “This phenomenon can signal a recession since investors are expecting a recession in the short run, usually within a year. If the economy falls into a recession in the short run, short-term interest rates will decrease, because the Fed would have to lower rates to stimulate the economy, pushing the expected long-term rates lower.”
Although no recession has been announced, these indicators actively occurring not only serve as a foreshadowing of what could come but as a reason for the public to worry.
If a recession were to happen, the recovery period is always uncertain, but recovery usually is seen by many different factors, according to Nguyenn.
“During recovery, real economic activity improves with firms investing and hiring again, consumers spending more, banks loosening lending, “Nguyen said. “As a result, real GDP increases, and the unemployment rate decreases.”
Feature graphic by Connor Lālea Hampton
