Deep Dive: What Causes a Recession — The Key Economic Indicators Every Investor Should Watch
Recessions are an inevitable part of the economic cycle, yet they still catch most investors off guard. The National Bureau of Economic Research (NBER) — the official arbiter of U.S. recessions — defines one as a significant decline in economic activity spread across the economy, lasting more than a few months. But by the time NBER makes its call, the recession is often already well underway. That delay is why investors focus on leading indicators: economic data points that tend to deteriorate before a downturn officially begins. With Google searches for "recession 2026" up over 350% and comparisons to the 2008 financial crisis surging, anxiety about the next downturn is clearly rising. But fear isn't analysis. The question isn't whether people are worried — it's what the actual data says. In this guide, we walk through the most reliable recession indicators, explain why each matters, and show where they stand today using the latest data from the Federal Reserve Economic Data (FRED) database. Whether you're a long-term investor stress-testing your portfolio or simply trying to separate signal from noise, these are the numbers that matter most.