Across the United States, warning indicators are emerging throughout the economy, placing increased strain on everyday Americans.

In just the past week, significant layoffs have swept through major corporations such as Amazon, UPS, and General Motors, impacting tens of thousands of workers.

In Las Vegas, a leading casino and resort operator, known for managing hotels like Caesars Palace, disclosed that 90,000 hotel rooms remained unoccupied this summer as Americans avoided costly vacations.

Adding to the economic concerns, the price of gold, which had soared to record levels earlier in October, is now experiencing a sharp decline. Analysts are cautioning about a potential ‘mini-bust’ looming on the horizon.

Further compounding these issues, recent data indicates that 15 percent of homebuying contracts were canceled in September, stoking fears of a real estate crash reminiscent of 2008.

Amidst these troubling signs, the stock market is reaching all-time highs, while major technology firms and big banks are reporting robust earnings, painting a complex picture of the current economic landscape.

But experts are warning that we are seeing a ‘K-shaped’ economy — so called because, like the letter K, some people and industries shoot upwards while others fall behind.

Here, the Daily Mail breaks down the signs that the US economy is careering towards a downturn.  

Jobs

The US job market has slowed to its weakest pace since the pandemic-era recovery, with billion-dollar corporations like Meta, Amazon, Walmart and Microsoft cutting staff, freezing hires or automating away roles altogether.

Now, roughly 7.4 million Americans are unemployed, according to the most recent federal jobs numbers.

But there are several reasons for the job losses. 

Companies are slashing back after over-hiring following the pandemic and firms are increasingly turning to Artificial Intelligence to replace workers. Interest rates also remain elevated, making investment in workers more expensive. 

In particular, these job cuts are hurting tech workers at the start of their careers, analysts told the Daily Mail.

Laura Gassner Otting, a former non-profit CEO and White House advisor, called the lack of beginner tech roles a ‘vanishing first rung.’

‘AI and automation are eliminating many entry-level roles,’ she said. ‘For young professionals, it means being locked out before they can even prove themselves.’

Women, she noted, have been the hardest hit by the hiring changes, slowing down their promotion prospects and earnings potential.

Chelsea Walker, a 42-year-old HR specialist, has been out of a job for over a year after being laid off from TikTok and has applied for over 1,000 roles.

‘I am not in control of my future,’ she told the Daily Mail.

‘My home is at stake right now, and my prospects are extremely thin. I worry day and night about what I am getting ready to lose.’ 

Cars

Meanwhile, Americans are struggling to keep up with ballooning car payments.

Since 2019, the average price to drive a new set of wheels off a car lot has risen 30 percent to $50,000. To finance cars, American shoppers are putting an average of $6,000 down, spending more than $750 a month, and financing at interest rates above six percent.

Additionally, drivers owe $1.66 trillion in auto loans, the second-largest debt load in the American economy after housing mortgages.

‘Families are in an economic pressure cooker,’ said Erin Witte, the director of consumer protection at the Consumer Federation of America.

‘It looks alarmingly similar to trends that were apparent before the Great Recession.’

Last year, a record number of vehicle owners fell into delinquency, defaulted or had their cars repossessed. 1.73 million cars were seized in 2024. That number is expected to rise this year, with September seeing a 16 percent increase in repossessions over 2024.

And independent analysts do not see a cheap car savior on the horizon for 2026.

‘2026 is one of the more uncertain years to forecast I’ve seen,’ Ed Whiston, an automotive analyst at Morningstar, told the Daily Mail.

He said some buyers could return to dealerships if the Federal Reserve cuts interest rates, but tariffs will likely keep prices elevated, locking out many middle- and working-class consumers.

‘Maybe those cancel each other out, maybe consumers really freak out and things collapse,’ he added. ‘It’s really hard to say for sure.’

AI bubble 

Big tech and artificial intelligence stocks are seeing a stratospheric rise, even as the rest of the market remains fairly flat. 

Last week, chip maker Nvidia became the first company in history to hit $5 trillion in value — up more than 50 percent in a year. 

But experts are warning that this huge boom could lead to a monumental bust, with devastating consequences for the US economy.

Some have compared AI stock gain to the dot-com bubble, when internet-based companies saw a huge growth in the late 1990s before crashing in the early 2000s. 

‘We think the risk of a downturn in the tech sector is lower than at the height of the 2000 dotcom bubble, but it’s far from negligible,’ said Oxford Economics lead economist Adam Slater.

‘A particular concern is that the predictions of very large and sustained productivity gains from AI may not materialize.’

However Wall Street legend Steve Eisman told the Daily Mail there is a key difference between the market now and then.

The investor, who famously predicted the 2008 financial crash, said that in the 1990s very young companies that had no revenue were spending borrowed money. 

‘They overspent and the returns weren’t there, and many of them went bankrupt. And then those that survived eventually thrived.’

This time around, is ‘healthy,’ Eisman said, as the money being spent on AI is being spent out of companies’ cash flow.

Gold

For centuries, gold has shone brightest in dark times — a refuge when paper money weakens and faith in governments falters. 

It spiked after the oil shocks of the 1970s, again during the 2008 financial crash, and once more in 2020 as markets panicked about Covid. That history is why its recent rollercoaster run has economists worried.

After soaring to an all-time high above $4,350 an ounce on October 20, gold prices suffered a spectacular crash the next day, tumbling nearly six percent in their biggest one-day drop since 2013.

It was a brutal end to one of the most frenzied rallies in years. The precious metal had surged more than 50 percent in 2025, driven by fears over inflation, political gridlock and global instability.

But the rally is not over. After dipping below the significant $4,000 milestone last week, it rebounded. 

Even ordinary Americans joined in — snapping up mini-bars at Costco and trading gold on apps that once catered to meme-stock mania.

But as Wall Street’s major indexes hit record highs, the picture has become confusing. In normal times, gold spikes when everything else is falling. Today, it is rising — and falling — alongside booming tech stocks and record corporate profits.

‘Gold is flashing a warning that fear is still lurking beneath the surface,’ said David Morrison, senior market analyst at Trade Nation. ‘Investors are hedging against a downturn even as the stock market pretends nothing’s wrong.’

Whatever comes next, the gold rush of 2025 is more than just a trading story. It is a mood indicator — proof that while America’s markets may look unstoppable, many investors are quietly preparing for the storm they suspect is coming.  

Retirement and 401(k)s

There are two distinct narratives when it comes to how much Americans are saving for retirement, experts warn.

‘The retirement prospects for those who are employed have likely improved over the last few years,’ Robert Brokamp, senior retirement advisor at the Motley Fool, told the Daily Mail.

‘The S&P 500 has returned almost 23 percent per year since October of 2022, and 401(k) participation and contribution rates are at all-time highs.’

But this is an example of the K-shaped economy, he said. 

‘Some people’s net worths are skyrocketing, while others are seeing their prospects plummet.’

More people are also taking hardship withdrawals and emergency loans from their 401(k) accounts as they grow increasingly desperate – meaning they are taking money out of their retirement plan for an ‘immediate and heavy financial need.’ This is usually not recommended unless it is crucial, as it cuts down on the amount of money that is able to grow with interest in the account over time.

According to a survey of small business leaders by retirement plan provider Human Interest, in July, 24 percent said they had seen an increase in 401(k) loan requests and withdrawals. 

Pets 

An unofficial yet heartbreakingly reliable indicator of an impending recession is a spike in owners giving up their pets.

When the economy worsens — with higher living costs, inflation or job losses — pet owners increasingly find themselves unable to afford food, veterinary care or housing that allows pets. As a result, more people surrender or abandon their animals.

‘We’re seeing surrender rates at very high levels. In measurable terms, shelter inventory capacity has increased five to ten percent over the past year,’ Ryan Howard, founder and CEO of AI pet adoption network Buddy, told the Daily Mail.

‘Many rescues are at or over capacity, and in kill states like Texas, euthanasia rates are at record highs.’

Shelters and rescues track intake volumes closely. Rising shelter inventories — such as the increase reported over the past year — correlate strongly with broader economic stress. These surges mirror patterns seen during past downturns, such as the 2008 financial crisis.

Pet abandonment and euthanasia rates are highest in lower-income, rural regions, where economic vulnerability is greater. Urban areas with better-funded animal control systems show less strain, even during downturns.

‘We’re seeing it everywhere, but it’s worse in rural areas where incomes are lower,’ said Howard.

When people can no longer afford to care for their pets — often among their most emotionally valued family members — it’s a strong sign that household finances, and the broader economy, are under pressure.

Credit cards

Credit card balances are ballooning, with total credit card balances at $1.09 trillion, according to TransUnion, and average debt per borrower is at a record $6,473.

Those figures are up 33 percent and 23 percent, respectively, over the past three years. 

‘That sounds very negative, but it’s not all bad,’ said Ted Rossman, senior analyst at Bankrate. 

‘The household debt-to-income ratio is pretty low on a historical basis. Honestly, we would expect credit card balances to grow over time (at least in the aggregate) because people are using more cards and less cash.’

The population is also growing, the economy is growing and payments are becoming more digital, he said. 

‘Of course, there’s a huge difference between someone who’s using credit cards for rewards and convenience versus someone who’s truly carrying debt — and paying interest — from month to month.’

According to Rossman, about half of credit cardholders pay bills in full each month and about half carry debt from month to month.

Credit scores 

Meanwhile, the average American’s credit score has also taken its biggest hit this year in decades. 

The average FICO score in the US has dropped to 715 from 717 — the largest one-year drop since the Great Recession, according to data from the credit-rating giant. 

The drop may sound insignificant, but experts warn that it is a red flag for the state of the economy. 

Meanwhile, missed federal student loan payments are now being reported on credit files after being paused during the pandemic.

‘This is really driving the increase in severe delinquencies,’ Tommy Lee, senior director of scores and predictive analytics at FICO, said.

Low credit scores make it difficult for people to qualify for financial products, including credit cards and mortgages. 

Rossman said that a relatively low unemployment rate and relatively strong wage growth are helping Americans’ finances, but many people are being left behind. 

‘Sadly, many are struggling, although those individual struggles are masked in the overall data by the fact that many others are doing quite well,’ he told the Daily Mail.

‘This relates to broader themes like income inequality and the K-shaped economy, which is when the rich get richer and the poor get poorer.’

Foreclosures 

The real estate market is also flashing warning signs that an economic crash is coming.   

Foreclosures are a sign of economic trouble that is worsening, and from 2024 to 2025 there has been a dramatic rise in foreclosure filings across the US.

In July through September 2025 alone there were a total of 101,513 properties with foreclosure filings, a 17 percent jump from the same period in 2024.

Foreclosure is when a bank or lender takes back a home because the owner has fallen behind on their required mortgage payments.

Florida-based realtor Jeff Lichtenstein blamed President Donald Trump’s tariffs, which he said have made everything more expensive and have ‘become the consumer’s problem.’

‘Because of the tariffs, the middle class and upper middle class are feeling the pinch too. With the cost of goods out there, many people are now underwater and can’t pay the mortgage,’ he told the Daily Mail.   

Canceled contracts 

Buyers are also increasingly pulling out of deals at the last minute. 

In September, 15 percent of buyers cancelled agreements, according to a report from Redfin. That is the equivalent of just over 53,000 agreements nationwide that were abruptly pulled as prospective buyers got jitters or panicked that a recession could be on the horizon. 

There is also a huge surplus of homes on the market, so buyers are using that imbalance to wield more negotiating leverage. They are asking for massive price cuts and other concessions such as repairs being paid for by sellers.

‘I’m seeing a lot of buyer’s remorse,’ said Jo Chavez, a Redfin Premier agent in Kansas City. 

‘Buyers make an offer, then they start worrying they could have found a better deal or a better home because there are more home sellers than buyers in the market. 

‘Some other buyers are backing out because they’re concerned about job security.’

Listings flooding the market 

Streets lined with for sale signs are another indicator of economic troubles across the US.

There is a huge influx of homes on the market, many of which are simply not selling.  In fact, homes are lingering on the market longer in 44 out of 50 major US metros, according to Realtor.com analysis. 

The average home spent a 60 days on the market in August, a week more than the same time last year. 

Buyers are hesitant, held back by soaring mortgage rates and wider fears of a financial downturn. 

According to Lichtenstein, mortgage rates need to come down considerably from their current level in order for the housing market to get moving. As of October 30, the 30-year fixed rate mortgage averaged 6.17 percent. 

‘A rate of five percent would be the magic number right now,’ he said.   

Nearly half of the biggest cities in the US are now seeing home prices fall — cutting into a key source of wealth for average Americans.

According to the S&P Cotality Case-Shiller index, of the 20 major metros that it tracks, nine recorded price declines in August. 

‘For the fourth straight month, home values have lost ground to inflation, meaning homeowners are seeing their real wealth decline even as nominal prices inch higher,’ said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices.