The US stock market’s downward trend appears to be continuing, with the Dow Jones Industrial Average and the S&P 500 down 4% and 6%, respectively, this year. And this is just one of many signals that should prompt any sensible business leader, investor, or policymaker to start preparing for a US economic slowdown, or even a recession.The first sign that a US economic slowdown may be imminent is worsening consumer sentiment. The University of Michigan’s index of consumer sentiment fell from 71.7 in January to 64.7 last month, its lowest level since November 2023. Similarly, The Conference Board’s Consumer Confidence Index declined by seven points in February, to 98.3. More ominous, its Expectations Index – which reflects consumers’ short-term outlook for income, business, and labor-market conditions – dropped 9.3 points to 72.9. Anything below 80 usually signals a recession ahead.
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