We’re hearing more and more that the U.S. is on the verge of a recession, which is traditionally seen as two consecutive quarters of economic contraction, or a decline in gross domestic product. Officially, the National Bureau of Economic Research, which makes the final call, says it is “a significant decline in economic activity that is spread across the economy and lasts more than a few months.” The economy has already seen GDP fall 1.6% in the first quarter of 2022, and estimates show another negative quarter may be announced in a few weeks. While we await the latest growth numbers, here are some other signs a recession could be brewing in this week’s Five For Friday.

#5: Inflation

Inflation has been on everyone’s mind for at least a year as prices continue to go up across the board. Consumer prices surged 8.6% in May, the fastest pace in 40 years. The cost of food alone was up 11.9% in May compared with the year prior. And that’s just what consumers are paying. Producer prices spiked a record 10.8% in May. When inflation is going crazy, wages can’t keep up. It’s the equivalent of everyone in America being forced to take a pay cut.

#4: Consumer spending

The economy can’t grow if the people aren’t spending their hard-earned cash. Consumer spending ticked up just 0.5 percent in the first quarter of this year, adjusted for inflation. The COVID-19 pandemic-induced shopping sprees are coming to an end as people run out of disposable income. Americans saved $2.7 trillion during the pandemic, according to Moody’s Analytics. But the firm says households are burning through their stockpile and have already spent $114 billion of those savings as prices soar. 

#3: Oil price

With the average gas price in the United States reaching more than $5 per gallon earlier this summer, drivers have been begging for some relief at the pump. And in July, WTI Crude traded under $100 per barrel for the first time in two months. But falling oil prices actually represent a recession indicator. Citigroup said oil could drop to $65 per barrel this year if the country does enter a recession. That’s because recessions mean fewer airplanes in the sky and cars and big rigs on the road, and the dip in demand presses oil prices lower. 

#2: Housing market

Housing won’t be the catalyst it was with the Great Recession, but it gives insight into economic activity. After the rip roaring housing boom in 2020-early 2022, the market is getting weaker this year. The new home construction rate has fallen considerably below its 15-year highs in December. Meanwhile, housing affordability is at its lowest level in 16 years, according to the National Association of Realtors. This is all thanks to record-high housing prices and soaring mortgage rates. 

#1: Stock market

What investors do with their money has a ripple effect for everyone, and if you are planning to retire in the next few years, a recession might keep you punching the clock a little while longer. Remember, during the Great Recession, Americans lost $3.4 trillion in their retirement accounts during the market turmoil. The S&P 500 and Nasdaq are already in bear market territory as the street is pricing in recession risk.