7 Alarming Economic Indicators That Suggest the U.S. is Heading Toward a Major Downturn

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The warning signs are impossible to ignore. The U.S. economy is rapidly heading toward a major downturn, and if you’re not paying attention, the consequences could be disastrous. Here’s a breakdown of seven shocking indicators that suggest things are about to get much worse.

The rise of “buy-now-pay-later” services has become a ticking time bomb for an entire generation. These services, allowing consumers to break up payments into manageable chunks, have exploded in popularity—especially among Gen Z. But beneath the surface lies a disturbing truth: massive amounts of debt are piling up. Credit card balances for Gen Z have surged by 49% since 2023, and holiday shopping debt alone has spiked 31%. This trend shows no signs of stopping, and if it continues, the ripple effects will send shockwaves through the economy.

The job market is sinking. Hiring is plummeting across the board, and it’s not just a temporary hiccup. Hiring for middle managers has dropped a staggering 43%, while senior leadership roles have fallen 57%. Companies are clearly preparing for tough times ahead, as they become more cautious about workforce investments. This lack of opportunities for experienced professionals will have long-term consequences for career growth and organizational stability.

In November 2024, corporate bankruptcies surged with 69 filings, the second-highest since the 2020 COVID crisis. So far this year, there have been 634 bankruptcies, surpassing even the levels seen after the Financial Crisis of 2008. This sharp increase is a clear sign that businesses are struggling to keep up with rising costs and declining revenues. If these trends continue, we’ll see more businesses fail, further damaging the economy.

The construction industry, a bellwether for the broader economy, is in freefall. Job openings in construction have fallen by 40% since last year, bringing the industry back to 2020 levels. A downturn in construction signals broader economic instability, and with fewer construction jobs, we can expect the impact to ripple across many other sectors. If the construction industry continues to decline, the entire economy could face a slowdown in growth and development.

The official unemployment rate isn’t the full story. The U-6 unemployment rate, which includes those actively seeking work and part-time workers unable to find full-time jobs, hit 7.8% in November. That’s the second-highest rate in three years, highlighting the struggles many Americans face in securing stable, full-time employment. If this trend continues, the labor market will become even more strained, contributing to the economic slowdown.

Families across the country are feeling the pinch. In just a few years, inflation has caused the cost of living to skyrocket. A family making $80,000 in January 2020 would now need to earn $97,891.31 to maintain the same standard of living. This widening gap between wages and living expenses is creating significant financial strain for many households. If this trend persists, more families will struggle to make ends meet, leading to further economic stress.

If your family made $80,000/yr in Jan 2020.

You would now need to make $97,891.31 just to maintain the same quality of life. pic.twitter.com/nQ127GjEMM

— Darth Powell (@VladTheInflator) December 10, 2024

The combined weight of rising debt, stagnant wages, and increasing bankruptcies paints a grim picture. The once-reliable American dream is slipping away for many, as businesses face rising costs, and wages fail to keep up with inflation. As the gap between the rich and poor continues to grow, economic instability is becoming more pronounced. The pressure is mounting, and it’s only a matter of time before it begins to push the entire economy into a major downturn.

The signs are clear. Rising debt, unemployment, bankruptcies, and inflation are all warning us that the U.S. economy is heading toward a major downturn.

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