Recession Watch

A recession watch is on as financial fears rise and evidence mounts of a slowdown.

Walmart says shoppers are “budget-pressured.” McDonald’s says it’s had a “sluggish start” to 2025. Costco reports members are being “very choiceful” about spending. Kohl’s reports many shoppers are “pretty constrained.” Macy’s reports even affluent shoppers are “uncertain.”

Airlines also are warning of a slowdown as Americans cut back on travel. There’s “something going on with economic sentiment,” says the CEO of Delta Airlines.

It may not devolve into an official recession—loosely defined as two quarters of economic contraction—but the caution that business leaders and consumers are expressing is highly likely to lead to a slowdown.

Economic indicators are beginning to point down. The Conference Board’s Consumer Confidence Index fell for the third consecutive month in February to a point that usually signals a coming recession. A survey of manufacturers from the Institute of Supply Management showed a steep decline in new orders in February. Long-term Treasury bond yields sank below those of short-term Treasury bills, an inversion of the yield curve that is a well-regarded recession indicator.

Particularly worrisome was the Atlanta Federal Reserve’s GDP Now measure, which predicted in early March that the economy would shrink at an annual pace of 2.8 percent during the first quarter. It was a dramatic drop for the index, heavily influenced by a big widening of the U.S. trade deficit in January. But what many investors and analysts failed to note was the fact that much of that increase in the trade deficit resulted from a major jump in gold imports during January—nearly $33 billion worth, up from $13 billion—as major holders rushed to bring bullion to the U.S. to avoid potential tariffs.

Major gold investors were not only ahead of tariffs, but were also anticipating an economic downtown, as the price of gold hit a new record, topping $3,000 an ounce on March 13 in New York futures trading.