Elon Musk said yesterday he predicts a recession for later this year, a call many executives have made since President Donald Trump implemented his tariff regime. The threat to business activity has also caused concern about a potential recession. Some consumer behaviors can indicate when a recession might be on the way.
Amid Elon Musk and Donald Trump’s mudslinging on Thursday, the Tesla CEO said the president’s tariffs “will cause a recession in the second half of this year.”
Musk could be on to something. Other executives have had the same idea for a while, ever since President Trump instituted sweeping tariffs in early April. While he later put the highest rates on pause, risks remain. Survey results released by Chief Executive in May showed 46% of CEOs forecast a recession or slowdown in the next six months. Goldman Sachs also said in May it expects there is a 35% chance of a recession.
In April, Ray Dalio, founder of Bridgewater Associates, warned the U.S. could see something “worse than a recession.”
“Right now, we are at a decision-making point and very close to a recession. I’m worried about something worse than a recession if this isn’t handled well,” Dalio told NBC in April. “We have something that’s much more profound, we have a breaking down of the monetary order.”
While executive predictions and investment bank analysis can be a more reliable way to predict an economic downfall, there are several oddball recession indicators that come straight from consumers themselves.
Campbell’s soup
In its earning call this week, Campbell’s CEO Mick Beekhuizen said there is a “growing preference for home-cooked meals,” adding it was the highest level since early 2020. And that could be a bad sign for the economy.
Consumers dining out less and opting more for cheaper alternatives like Campbell’s soup signal a tightening budget. Meanwhile, spending on discretionary items like crackers and chips declined, Beekhuizen said.
Snacks
Campbell’s is already starting to see a decline in discretionary spending on snacks—and so are some other major snack food companies.
In February, Nestle posted its weakest sales growth in more than two decades. PepsiCo, the maker of Lay’s and Tostitos, also reported earlier this year net sales had dropped by 2% and volume for savory snacks fell 4%.
“Consumer conditions in many markets remain subdued” and “have an uncertain outlook,” said PepsiCo CEO Ramon Laguarta.
Pizza
Also in the food-related realm, pizza purchases can serve as an indicator of economic conditions. A Bloomberg analysis published Friday shows low-income consumers are being “priced out of pizza,” and same-store sales were down during the first quarter at Pizza Hut, Papa John’s, and Domino’s.
Since 2019, the average price of a large pizza at the top five chains is up 30% to $18.19, Richard Shank, an analyst at market research firm Technomic, told Bloomberg. Meanwhile, Nestle reported frozen pizza is one of its “underperformers” due to pricing, according to Bloomberg.
Lipstick
The lipstick index was popularized during the 2008 recession, and stems from Estée Lauder heir Leonard Lauder noting his company’s sales of lipstick rose after the 2001 terrorist attacks.
The idea is that when the economy is struggling, sales of affordable luxury items like lipstick, nail polish, and perfume tend to increase. Although consumers may be tightening their belts, they want something affordable to feel a sense of normalcy—i.e. a $5 lipstick from the convenience store.
E.l.f. Beauty, which recently announced it had acquired Hailey Bieber’s makeup company Rhode, reported on May 28 its net sales jumped 28%. L’Oréal reported in April its lip products “fueled its strong innovation lineup,” and helped its consumer products division outpace the market. Ulta Beauty also had a strong earnings report in late May, seeing net sales jump 4.5%.
Men’s underwear
Another odd recession indicator is the men’s underwear index. Alan Greenspan, who served as Federal Reserve chair from 1987 to 2006, followed this index, which assumes people treat men’s underwear purchases as discretionary spending and they’ll purchase less of it during recessions.
Calvin Klein, one of the most ubiquitous men’s underwear brands, saw fourth-quarter revenue drop 5% due to a “a tougher than expected macroeconomic backdrop,” according to CFO Zac Coughlin.
Champagne
While consumers may buy affordable luxuries during a recession, they tend to shy away from more expensive treats, like champagne. Bubbly sales dropped dramatically in 2024, and provisional February sales data shows sales continued to decline this year, according to Wine Searcher.
“Champagne is a true barometer of consumer mood,” said Maxime Toubart, president of the Champagne Syndicat Général des Vignerons (SGV) and co-president of the Comité Champagne. “This is no time for celebration, with inflation and global conflicts taking place, as well as economic and political uncertainty in some of Champagne’s largest markets, such as France and the U.S.”
As costs continue to rise, “people have less disposable income to splurge on champagne,” Emma Versaw, head of alcohol business at retail technology company Swiftly, previously told Fortune. “So maybe there aren’t less celebrations, but less extravagant celebrations.”
Rich people moving
One TikTok user also suggested that more wealthy people are moving to increasingly exclusive places and that that’s a recession signal.
“There are new levels of exclusivity,” the user said. “People are climbing this social ladder and trying to be around the rich, trying to be rich, all that stuff, and improve their lives. The people who are already in there—the established rich—are moving away.
“There’s new tiers opening,” she added, citing airlines adding more exclusive lounges.
“It feels like each time the 99% break that ceiling—or at least crack it—the rich build another level with another glass ceiling. I think it’s about to be more severe now that we’re kind of in decline,” she said.
Storage units
As housing becomes increasingly expensive, people turn toward storage units to house their goods when they’re not able to downsize. A Financial Times analysis published in April found the number of storage units is growing, which could serve as a recession indicator.
This story was originally featured on Fortune.com
