Key indicators signal U.S. recession could be closer than we think

Experts are warning that a U.S. recession may be hard to avoid.

Transcript

00:00Recession is always really indicated by a couple of factors. When you start to see the number of

00:06hours worked. So what a lot of employers will do, they've learned the tricks of the trade, right?

00:10And what they will do is they'll say, we're not laying people off, but we are, and we're paying

00:14people more money per hour, but they're cutting the hours. So we like to look at the Fed charts

00:19that overlay, you know, hours worked with, you know, all of the forward indicators. And we see,

00:23yeah, this is a problem. So we're looking at hours worked. And if you start to see hours work

00:27getting cut, and if it gets cut exponentially, then that is the precursor to layoffs. If layoffs

00:32start to come because economic activity globally slows down, and we know that the purchase managing

00:36factor index, we know PMI and a lot of the leading indicators are a problem. The other thing that's

00:41really a tower bucket is the consumer sentiment. University of Michigan has had consumer sentiment

00:45down three months in a row. I think it's kind of fair to say that's to be expected when you have

00:50a new administration that's implementing policy that's disruptive globally, and it is affecting

00:54the markets. So that would make investors be more skeptical and to the downside and consumers

00:59more skeptical and to the downside. But if we continue to see hours cut, layoffs start to come,

01:05and consumer sentiment, which means that affects retail spending, and that comes down and gets

01:09curbed to the downside, then we're starting to really think, is the recession coming? Because

01:13consumers tell us a recession is coming before the actual GDP contraction happens.

01:17From my perspective about a recession for 2025, I mean, I think that it would be very easy to get

01:23into a recession if the market adversely retaliates against the Trump tariff policy and we don't see

01:30levelization and stabilization. If we get negative reactions that get ingrained into international

01:36trade policy, then I think it would be very easy for us to be, you know, into a recession. And the

01:42reason for that is we already saw global economic activity, shipping slow down, manufacturing slow down.

01:49We've already seen indicators at the global energy. Look at the energy prices. We were in the 70s now.

01:55We had a day where we touched into the mid-50s to the low 60s. So we're really seeing potential

02:02slowdowns. And that is an indication that, OK, if the world is slowing down, we in America are

02:07consumption based on the services side of things. We're a service consumption based economy. And so if

02:13the world is slowing down and we're not getting the goods to come over here, we're not buying them,

02:17then we're going to really easily be in a recession. And it's almost like we have to fight

02:21very hard to stay out of recession because we've had so much money printed since 2020 and coronavirus

02:29that, like, our budget and our spending in America is $7 trillion, which is basically

02:34wartime-level, pandemic-level spending. We're only collecting $5 trillion. So to be spending at a

02:41pandemic, wartime level every year forever is lunacy. And we can't afford it. And it should put our

02:49economy into a recession.