Today, Explained - The recession indicator game

Episode Date: June 8, 2025

Press-on nails, new music from Katy Perry, and an uptick in Klarna purchases: signs of an economic downturn or no? This episode was produced by Hady Mawajdeh, edited by Miranda Kennedy, fact-checked by Melissa Hirsch, engineered by Matthew Billy, and hosted by Jonquilyn Hill. Photo of Katy Perry performing in Sydney, Australia by Nina Franova/Getty Images. If you have a question, give us a call on 1-800-618-8545 or send us a note here.  Listen to Explain It to Me ad-free by becoming a Vox Member: vox.com/members. Help us plan for the future of Today, Explained by filling out a brief survey: ⁠voxmedia.com/survey⁠. Thank you! Learn more about your ad choices. Visit podcastchoices.com/adchoices

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So are our playlists indicating larger economic trends? There is a super wide range of so-called perception indicators online right now. Hey there. I'm Jonquin Hill, and this is Explain It to Me, where we answer the questions that matter most to you. we answer the questions that matter most to you. Your call has been forwarded to an automatic voice message system. Hi, my name is John Ribeiro. I live in Boston, Massachusetts. I work at a liquor store and

one of the things that my colleagues and I talk about is how we notice more people are using cash. And we always notice that when there's sort of uncertainty in the economy, it seems like maybe more people are managing to use their money by having it physically so they can sort of keep track of how much they're spending instead of potentially overspending and treating their debit card

like a gift card. I wanted to know what are the real recession indicators outside of like the things that you see on TikTok? That's a great question, John. And to find out, I reached out to journalist Hannah Aaron Lang. I am a reporter on the market steam at the Wall Street Journal. I've covered the economy and business for most of my journalism career. And basically what I do now is watch the stock market every day and write about what it means for real people.

So when you log on to your social media of choice, you know, you see all these people calling things recession indicators, you know, low rise jeans, cutting down on manicures. What's fueling these online recession indicators? I would say there's been some kind of bad vibes floating around the economy for a while now, probably in some shape or form since the start of the pandemic. Can somebody explain to me in crayon eating terms why I make over three times the federal minimum wage and I cannot afford to live? This economy is so bad.

Thirty three dollars for toilet paper. We can't even afford to shit. I know the economy is getting worse and worse because more and more of my Uber drivers have been wiped. And this is terrifying. I think a lot of that has come from the inflation we saw kind of coming out of COVID. Everything that we need, coffee cups, coffee, sugar, milk. Everything is a lot more expensive. Everything is inflated. When I go into the grocery store, it's sticker shock.

It's not like it used to be. I used to try to buy one month's worth of groceries, but not anymore. Prices climbed quite quickly, and the inflation rate has come down a lot since then, but we're still looking at a higher cost of rent, eating out, other goods and services. And I think that's difficult for everyday people to navigate.

Things have also just gotten more chaotic this year in general when we think about markets and the economy. In early April, President Donald Trump announced his plan for sweeping tariffs on much of the United States trade partners across the globe. You see the numbers, the numbers are so disproportionate, they're so unfair. At the same time, we will establish a minimum baseline tariff of 10%. Basically saying we were going to impose these huge charges on imported goods that really spooked investors and financial markets and stocks fell sharply. And as those major stock indexes tumbled

and investors tried to make sense of what this was going to mean for the United States, we started to hear people on Wall Street talk about the potential of a recession again as a result of the kind of economic turmoil caused by this trade policy plan. I think it's more likely than not we're gonna have a recession by this trade policy plan. I think it's more likely than not

we're gonna have a recession. And in the context of a recession, we'll see an extra two million people be unemployed. We'll see losses in household income. What are some of the top so-called recession indicators being talked about right now? There is a super wide range of so-called recession indicators online right now. This can be everything from a skincare company selling eggs. The prices of eggs have dramatically gone up.

So the ordinary, a skincare company, said we're going to take this problem on and give you an ordinary price of $3.37 for eggs to press on nails coming back. Recession indicator. Princess nails. I haven't seen one person in long acrylic stiletto coffin nails in a very long time. Everybody got some short nails on. To certain fashion trends like women in menswear and women in office wear if no money we can't have two outfits for work and play when the business gets casual the money goes out

the door okay the second bitches start putting on blazers and a collared shirt it's over keep a lookout and they can range from the reasonable so i'm'm a curbside shopper at HEB. And honestly guys, the number one recession indicator should be that everyone is getting spaghetti. To what I would call the more ridiculous, like sightings of Snooki from Jersey Shore. Is Snooki falling backwards out of her seat at a club a true recession indicator?

Let's talk about it. Or Lena Dunham leaving New York. A recession indicator. Or the fact that Gwyn Or, Leina Donovan leaving New York. A recession indicator. Or the fact that Gwyneth Paltrow said on a podcast. If I'm honest and getting back into eating some sourdough bread and some cheese, there, I said it. There's a super wide variety of what qualifies as a so-called recession indicator on the internet. Okay, some of these indicators admittedly feel kind of extra. Do you think any of them are real signs of economic troubles? Well, I think that some of

them could definitely be considered a more realistic piece of evidence about the economy, right? So I think of one particular example. One of these posts about our so-called recession indicator was about the partnership between Klarna and DoorDash. So the idea that people might be in a financial place where they want to pay for delivery or takeout and installments as opposed to paying for that upfront. So that could be a sign that maybe some folks, their budgets are tight, they're having to cut back on spending, or they maybe can't afford to eat out as much as they used to. When we're talking about something like that, what we're really talking about is consumer

spending, right? It's the engine of the US economy. And if people stop spending money, that's really bad news. Other times, these so-called recession indicators are more just trends from the 2008, 2012 era that have worked their way back around. I'm thinking of maybe low rise jeans or those knee high Converse sneakers that you can lace up to the knee.

That were super popular when I was in grade school. Or big dancey pop songs by Lady Gaga, L'Arkesha. These are more trends from maybe the Great Recession era that folks spot working their way back into pop culture and see as a recession indicator in that way. Yeah. Okay. Most of these alleged recession indicators we're talking about, you know, they're coming from social media users and influencers, but what about the experts?

You know, y'all look at economic data, but do economists look at trends too? So this habit of searching for economic clues like this in unusual places is not a new one. And I would say that experts do it all the time. Of course, we have these really reliable, robust economic data sets like the jobs report, the inflation report, the PCE, something called the personal consumption expenditures index that the investors and economists are looking at on a regular basis, right? But those reports can be lagging in that way. So economists and investors are often looking at these kind of offbeat sources of data or

offbeat trends. Former Federal Reserve chair Alan Greenspan famously looked at sales of men's underwear, right? Greenspan looked at men's underwear sales as a key indicator of whether we're heading into a recession. With the idea being that if you have to cut back, this might be a place where nobody else is going to know but yourself. Now, Greenspan paid close attention to this because, according to him, men's underwear

sales would stay pretty steady year after year. Didn't matter boxers or briefs, but any time there was a dip, that would tell Greenspan that guys are pinching their pennies, not replacing old underwear, and to him, that would signal an economic downturn. Then there are also these urban legends of the hemline index. This phenomenon was first observed during the 1920s or the roaring 20s when the economy was great. The hemlines got a lot shorter, and then the further they moved towards the Great Depression, the

longer the skirts got. So young people online are definitely not the first people to search for economic insight off the beaten path, so to speak, but they certainly are taking it to a new level. Okay, so I want to play a game with you. It's the recession indicator game. I'm going to toss out some of these, you know, supposed recession indicators at you. And you tell me whether it's right to consider them like a plausible sign of impending economic doom. Okay. Press on nails.

I would go with plausible. It could be that times are tough, you need to cut back, maybe you're cutting manicures out of your budget. Returning to your natural hair color. Plausible for the same argument. Statement necklaces. I would go with not so plausible. I'm not quite sure how that one could connect back

to spending bad news for fashion, maybe, depending on your opinion, but maybe not the economy. Declining to tip at the strip club. Blasable. Maybe folks have less discretionary income and they just can't afford it. Also, you guys, don't go to the strip club if you can't tip. That's the whole point. Right, right? It's kind of like going out to eat. Like the tip has to, I think, you can't tip. That's the whole point. Right, right. It's kind of like going out to eat.

Like the tip has to, I think, be factored in. Pay those ladies. Okay, fewer meals out. Definitely plausible. I know economists and other experts that actually watch for this type of data. Whole body deodorant. I would say that's debatable.

I think it depends. Ooh. Are we buying it because the hot water bill is getting too expensive or are we buying it because we're too lazy to shower? I think that's the key. Okay. And finally, paying in cash for your liquor. This one, I feel like I would need to see more data on, especially because we pay in cash maybe for a potential discount, like to avoid a credit card fee. Are we buying less liquor? I feel like I would need a little more context on that.

Thanks for playing the Recession Indicator Game. Don't forget to have your cats and dogs spayed and neutered. We're going to come back to you in just a few for some more realistic advice on what to keep in mind when you're trying to spot an economic decline. But first we're going to investigate the indicator that's making Kesha cool again. That's after this break. Sounds like you're at the top of your financial game. Rise to it with the BMO Eclipse Rise Visa Card. The credit card that rewards your good financial habits. Earn points for paying your credit card bill in full and on time every month. Level up from bill payer to reward slayer.

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It's Explain It to Me, and we are so back. Today, we're talking recession indicators. The recession indicator I've been wondering about is this idea of recession pop. I asked Switched On Pop co-host Charlie Harding if our music tastes really do shift with the economy. Oh, we so are all looking for a crystal ball, and music feels like it's gotta be it,

because that's where we go to get into our feelings. So are our playlists indicating larger economic trends? I don't think so. Okay, that's interesting because lately there's been all this talk of recession pop. What is recession pop referring to? Recession pop is a made up after the fact genre referring to upbeat bubblegum pop music from the time of the Great Recession, 2007, you know, sort of lasting 18 months or so, but music that continues after that, because the economic vibes were pretty iffy for a few years.

So we're talking about Black Eyed Peas Lady Gaga Kesha I mean, I really do think that Katy Perry's whole oeuvre represents that era better than any other. We're talking about songs like Teenage Dream, a song which has this ongoing chord progression that never resolves, that makes you have the feeling of the teenage life that will just never end. You're never gonna grow up and it has this wonderful nostalgic quality to it or last Friday night the party that is the rager that you're gonna go all out in. Those songs had a sort of light effervescent sort of

post-disco very poppy programmed music kind of vibe. They were not serious, very tongue-in-cheek and I just think that Katy Perry is the queen of that recession pop sound. It has to sound a little over-polished, really well-made, programmed music. Meaning like drum machines, synthesizers, guitars in the line of like Nile Rodgers from Chic but not nearly as well done. So like sort of funk style, disco style guitars. Cheesy programmed strings in the background. And then the lyric has to be about some kind of either it's like party, party, party all

night forever, this night, that night, this night's never going to end or larger platitudes about like being a girl boss. You said this is sort of a genre that people have named it after the fact. Yes. And, you know, it's called recession pop because there was a recession. What else was going on in music during that time other than these, you know, fun, poppy, we're going to party all night long songs? Well, music was in a really difficult place. Music had been going through a recession for half a decade at that point.

Ever since the turn of the millennium and Napster, the illegal downloading market basically had eviscerated the music industry. The world has changed for the Goliaths of the record industry, Sony, Universal, and others. The record companies say they will lose billions in sales because fans are getting their music for free. You know, it saw its revenues cut in half. And so that business was in free fall to the degree that they thought that their future was in downloadable ringtones. downloadable ringtones. Oh my gosh that is so funny. So the whole music industry was struggling and was going through a lot of changes. I mean indie music was really big as the mainstream labels were struggling to figure out how to make

sales anyways. People there was a huge indie boom. Hip-hop was going through a sort of bling and party hip-hop era. There was a lot indie boom. Hip-hop was going through a sort of bling and party hip-hop era. There was a lot of upbeat music during these uncertain times. That's certainly true. I think it's important to note as well that during the Great Recession, there was plenty of music which didn't reflect an upbeat attitude. One of the biggest songs of 2007 was What Goes Around Comes Around by Justin Timberlake. of 2007 was What Goes Around Comes Around by Justin Timberlake. Or Umbrella by Rihanna. I don't think of those as upbeat happy songs. If you have to protect yourself from the rain on an umbrella, this is more acknowledging maybe our deep upset

of the national condition. So I think that even in the recession pop era, there's music of all kinds, upbeat, downbeat, sad, happy. And so I actually think that the genre is a very slippery one that represents a lot of different kinds of music. Are we hearing that sound pop up with any new artists now? Some people have said that supposedly like Chapel Rowan and Charli XCX are digging into that, you know, recession era in their new music. I'm a little more skeptical. If Recession Pop were doing really well right now, Katy Perry's Woman's World would have been a huge hit. -♪ It's a woman's world and you're lucky to be living in it.

-♪ And if anyone has followed, it has been a real stinker for her, unfortunately. Uh, a album full of kind of empty, anthemic songs that have really underperformed, leading to really poor album sales, ticket sales, and sort of a question of, is her entire career on the rocks? And so if she, for me, is the indicator of the original recession sound and recession pop were an indicator right now that we're leading into a recession,

I would think that Katy Perry's new music would be doing phenomenally well, and it's not. Why are we talking about recession pop right now? Why is that happening? Well, one is that everyone's looking for vibes of what's going on in the larger economy. But I think more largely, millennials are aging out of being cool. Oh, no. You stop listening to new music, usually between 25 and 30 years old. And then when you get into a position of power where you become a curator of culture, now it's your time to assert the thing that was good when I was young is still good.

So this could be less about the economy and more about like those of us born in the 80s and early 90s kind of having a midlife crisis a little bit. Absolutely. I think there was a huge cultural midlife crisis and a claiming of power. Okay, but Charlie, I will say I've seen tons of bars and clubs during these recession pop dance parties and I'm hearing like all these samples in music from current artists from that era. How do you explain all this? Oh, recession pop is very much a real thing, and it's completely made up, which is to say that there was no such thing as recession pop during the recession.

It's a term that was made up only very recently. Maybe someone used it on Twitter, but it's only become a part of the culture recently and it's absolutely a nostalgia driven way of getting maybe those Millennials who've got more disposable income than at any other point in their life certainly, you know since the recession and Maybe you want to get them back going out to clubs again Well, if you play their favorite music, you're gonna get them out and dancing again So I think the way that recession pop is being invoked is not trying to dig into the darkest moments

of the recession, but rather remembering what it's like to be 19 years old. Why do you think people turn to music in particular in these moments? What is it about music? I never quite understand these nostalgia cycles. There's like 10-year ones 15 year ones, 20 year ones. I do think that a lot of what happens is that the people who are producing music and distributing

music and the people who are promoting music, they again, they are millennials. And so the producers behind artists who usually are a little bit younger than the producers and the songwriters, I'm not surprised that they're imbuing some of their influence. So I think some of it is just, I think people are just trying to relive their youth. ["R-Word"] Okay, so our listening habits may not be the greatest economic indicator,

but what can we rely on to tell us if we're actually hitting the R word? We'll find out after this break. When does fast grocery delivery through Instacart matter most? When your famous grainy mustard potato salad isn't so famous without the grainy mustard? When the barbecue's lit, but there's nothing to grill. When the in-laws decide that, actually, they will stay for dinner. Instacart has all your groceries covered this summer.

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heart into making sure it's protected. Get insurance that's really big on care. Find an agent today at Desjardins.com slash business coverage. Okay, we're back with the Wall Street Journal's markets reporter, Hannah Aaron Layne. Okay, we're back with the Wall Street Journal's markets reporter, Hannah Aaron Lang. Okay, Hannah, I'm pretty sure I know the answer to this question, but I will ask it anyway. Are we in a recession? I would say no. It's pretty safe to say we're not in a recession right now. There are many pieces of the economy that are still healthy by historical standards.

Yeah, I think if you asked anybody on Wall Street or in the economics community, the many pieces of the economy that are still healthy by historical standards. Yeah, I think if you asked anybody on Wall Street or in the economics community, the answer would be no. Okay, this brings me to a question posed by our listener, John, who we heard from earlier. I wanted to know what are the real recession indicators outside of the things that you see on TikTok? Another listener named Isaac called in

with a similar question. I have a question about the recession indicators. There's all this talk about like the stock market and the GDP. There's all sorts of different indicators. So among all of the indicators, like what is the most significant at getting at like the daily, everyday person's quality of life? What are the indicators normies should be on the lookout for? Well, I think a big one that I've mentioned already is reduced consumer spending.

And some of these internet recession indicators kind of get at this, right? When uncertainty is high, most of us cut back on the extras in our budget and look for maybe cheaper ways to cover the necessities. If that happens on a large scale across income brackets, that will absolutely slow the economy. And I think the big one for everyday people is the job market, right? When sales start to slow at companies, when the economy contracts, employers start making layoffs and that obviously has a huge impact on somebody's life and would spur even more households to have to rein in their spending, right?

So I think signs of what I would call the labor market getting weaker, right, which is more job cuts, the unemployment rate going up, hiring slowing even more significantly than it already has. And I should mention that an official recession can actually only be declared retroactively. So it can be hard to say if we're in a recession right now. What would you recommend people do to prepare for a potential recession? I think that's the real question, you know? I think if I had to give one tip, the biggest thing I would say is probably an emergency fund, anything from three to 12 months of living expenses saved.

You really just want to have a cushion should something happen, like a job loss, right? I understand that might be really challenging for folks to prepare or build up right now, given the affordability challenges we faced over the past few years. But I think being prepared in the event of an unfortunate situation like that, I think could be really beneficial. Are folks right to be worried about the economy now, or are we actually in a better place than we collectively feel like we are? I think both of those things are true.

Again, the economic data is relatively reassuring right now. The inflation rate has come down so much from where it was in 2022, right? And the job market, as I've mentioned, is still healthy. Unemployment is still low. The layoff rates is still low. The stock market has rebounded, right? And the job market, as I've mentioned, is still healthy. Unemployment is still low. The layoff rates is still low. The stock market has rebounded, right? It's back to where we were prior to the worst of the tariff turmoil kind of starting, right?

On the other hand, I think it's absolutely true that this has been a very difficult economy to navigate for many people, particularly young people, right? I think that if folks are sensing that this is a difficult economy to kind of get started in as an adult, I think that there are very real phenomena to point to that backs up that case, right? So I think it's both. And though not every recession indicator that we're labeling online is is necessarily real by academic standards. I think the sentiment at the core of it is.

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This episode was produced by Hathi Mawakdi. It was edited by our executive producer Miranda Kennedy, fact-checking by Melissa Hirsch, and engineering by Matthew Billy. I'm your host, Jonqueline Hill. Also, before I let you go, I gotta let you in on something. Vox membership is having a sale. You can get over 30% off right now,

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