Economic downturns are often signalled long before official reports confirm them. While GDP forecasts and stock market trends are critical, everyday consumer habits provide early warning signs of potential trouble. In Atlanta last week, financial analyst Sarah noticed something striking at her local Costco shoppers were prioritizing bulk essentials like rice and canned goods over ready-made meals and premium snacks. This subtle shift in consumer behaviour could be an early indicator of economic distress.
1. Declining Restaurant Sales Reflect Consumer Caution
Dining out is one of the first expenses consumers cut when financial uncertainty looms. According to the U.S. Census Bureau, restaurant and bar sales declined 1.5% from January to February 2025, signaling reduced discretionary spending. Historical trends reinforce this pattern—during the Great Recession, inflation-adjusted restaurant spending dropped by 11.5%, demonstrating how food service activity can serve as a recession barometer.
2. Grocery Carts Show a Shift to Home-Cooked Meals
Changes in grocery shopping habits further reinforce consumer caution. Costco’s Chief Financial Officer recently reported a shift from “food away from home” to “food at home,” with more shoppers opting for cheaper meats and bulk cooking staples. As economic anxiety grows, individuals prioritize cost-effective, home-prepared meals over restaurant dining, echoing past recession behaviors.
3. Lower Traffic Levels Indicate a Slowdown
A less conventional but highly insightful economic indicator is declining traffic activity. Whether measured through commuter observations or sophisticated satellite data analyzed by hedge funds, lower road congestion often coincides with economic downturns. During the 2007-2009 financial crisis, reduced traffic levels reflected declining business activity and workforce cutbacks. Today, quieter streets may signal a similar trend.
4. Consumer Sentiment Hits a Low Point
Another red flag: declining consumer confidence. The University of Michigan’s March 2025 Consumer Sentiment Index recorded a 10.5% drop, reaching its lowest point since November 2022. When consumers feel uncertain about their financial future, they tighten spending, which can ripple through markets and slow economic growth.
Conclusion
While these signs don’t guarantee an imminent recession, they align with historical economic patterns. Reduced restaurant sales, a shift toward bulk grocery shopping, and lower traffic levels suggest consumers are bracing for economic headwinds. If these trends persist, they could foreshadow broader financial challenges ahead.