Insights Into Economic Data and Research
Insights and commentary on recent economic data and research, from NerdWallet's Senior Economist Elizabeth Renter.
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May 30, 2025: Recession Indicators — the Real, the Correlations and the Just-For-Fun
Consumers and economists understand the concept of economic recession in different ways. Though the general public may play a bit fast and loose with defining the term recession, it doesn’t mean their sentiment is invalid. In fact, some of the tongue-in-cheek “recession indicators” trending on social media could offer clues to what’s happening in today’s economy before it shows up in the official data.
On April 6, Google search volume for “are we in a recession?” hit a level not surpassed since summer 2022, when we were also not in a recession. Unsurprisingly, Google searches for recession terms are correlated with negative consumer sentiment. When consumers feel bad about the economy, they seek external validation for those feelings.
In July 2024, 60% of Americans said we were in a recession, according to a NerdWallet survey at the time. We were not, though sentiment was low.
The final say on whether we’re in a recession lies with the National Bureau of Economic Research (NBER) Business Cycle Dating Committee, which identifies economic peaks and troughs. However, their identification of a recession is backward looking — we don’t know we’re in it until well after it’s started (and sometimes, after it’s over). So in real time, people may look for expert opinions (or social media influencers) to stand in for what the NBER may later tell them.
The real indicators: Economic data sources and models provide some of the clearest information on whether we’re in a downturn that warrants the recession label. Many of these are measures the NBER considers in its own determinations, including the unemployment rate, job growth, consumer spending and industrial production, for example. In addition, there are rules-of-thumb that might tell us whether we’re in a recession or one is coming. These include, among others, an inverted yield curve, two consecutive quarters of negative GDP growth and the Sahm rule, named after economist Claudia Sahm.
Potentially meaningful (non-economic) correlations: On social media, some trends being cited as recession indicators could be signals of a pullback in consumer spending, including DIY manicures, lower-maintenance hairstyles and budget-friendly at-home cooking. Even though TikTokers and YouTubers aren’t representative of the U.S. consumer as a whole, if they’re highlighting things happening more broadly, they could represent leading indicators for what we eventually see in spending aggregates, such as the monthly retail trade figures from the U.S. Census.
Purely entertainment: Many of the recession trends currently popping up on social media seem to be little more than nostalgia, and may be as much about finding solace in simpler times as anything related to the economy — think recession pop (welcome back, Kesha) and fashion that resembles what we were wearing during the Great Recession. Further, many actual correlations (hem lengths, I’m looking at you) are not predictive and could be purely coincidence. For example, the fact that viewership rates of “The Big Bang Theory” are moderately correlated with GDP growth doesn’t mean we should watch that data point as a potential indicator of the health of our economy.
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May 6, 2025: Souring Sentiment - Why Now is Different
Falling consumer economic sentiment is likely to impact future saving and spending decisions, and we’ll see these decisions make their way into the official economic data in months to come. But this isn’t the first time in recent history that people have felt bad about the economy. The difference is this time they’re lacking the protection of excess savings, low debt levels and a labor market more favorable to workers.
Consumer economic sentiment has been suffering, according to surveys from the University of Michigan and The Conference Board, two of the most well-known sources of such data. And some consumers may already be taking action — an overwhelming majority of Americans (87%) say they’ll change their financial strategy over the next 12 months because of the Trump Administration’s tariffs, according to a recent NerdWallet survey.
Just a few years ago, we saw similar lackluster consumer sentiment, but that didn’t bleed into the real data. The difference? Household financial situations. We could spend a lot of time unpacking why people felt bad when the economy was good in 2022 and into 2023 (I did some of that here). But their spending behavior didn’t change to match that sentiment because, on average, they still had excess savings, recent equity growth and a labor market biased in favor of workers. Now? Well, now that excess savings has been spent down, the stock market is particularly volatile, debt balances are up and accounts increasingly delinquent, the job market isn’t benefitting those in need of work and there is so much risk on the horizon.
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May 5, 2025: Unemployment Among Recent College Grads
Despite recent college graduates having a particularly tough time in the current job market, the most recent research indicates a postsecondary education still provides a good return on investment, long-term. From the time they begin their college career, students should be preparing for their exit — student loan debt, a gap before employment and a lower-than-ideal starting wage may be their initial realities. But a cautious approach to borrowing along with establishing fail-safes and solid support systems can make their entry into the professional world a bit easier.
The unemployment rate of recent college graduates (ages 22-27) is near 6% as of March 2025, according to the Current Population Survey. That’s higher than the overall unemployment rate (4%). Historically, the jobless rate of recent grads has been lower than the “all workers” rate. That first began to change around 2018, and since 2022 those rates have diverged further.
The BLS also publishes an annual release of related data, in greater detail. In that, the agency reports the unemployment rate of recent bachelor’s degree recipients (ages 20-29) to have been 15.3% in 2024.
Still, a college degree remains a good investment, for most. Recent research from the New York Fed indicates an annual wage premium of more than $30,000 for college graduates, though mileage varies based on the time spent achieving that degree and choice of majors.
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