The recent surge of so-called “recession indicators” across TikTok, Instagram and other social media platforms has puzzled many users, as the term was rarely part of everyday conversation until recently. What was once a niche phrase used by economists has now entered mainstream online discourse, fueled largely by viral content and Gen Z’s growing interest in economic trends.

The concept regained attention after a viral TikTok referenced the “Lipstick Index,” an economic theory suggesting that during periods of financial uncertainty, consumers are more likely to purchase small luxury items, such as lipstick, rather than make larger, more expensive purchases. These smaller indulgences allow people to treat themselves without placing significant strain on their budgets, reflecting declining confidence in the broader economy.

In today’s social media landscape, however, the term “recession indicator” has taken on a much broader and far less formal meaning. Users now label a wide range of behaviors, trends and purchases as recession indicators, often based on personal observation rather than established economic data. Before examining this newer interpretation, it is important to understand what the term traditionally means.

Historically, a recession indicator refers to a statistic, trend or signal used by economists to suggest weakening economic conditions or an approaching recession. These indicators are tools used to analyze shifts in the business cycle and identify periods of slowdown or contraction in the economy. While anyone can speculate about potential indicators, the official organization responsible for determining whether a recession has occurred in the United States is the National Bureau of Economic Research, or NBER.

The NBER defines a recession as a “significant decline in economic activity that is spread across the economy and lasts more than a few months.” Founded in 1920, the National Bureau of Economic Research is a nonpartisan, nonprofit, private organization that studies economic changes, develops statistical measurements and analyzes economic behavior. The organization is widely trusted due to its emphasis on empirical evidence, its commitment to credibility over political ideology and its use of researchers from highly accredited institutions.

Contrary to popular belief, a recession is not defined by a single factor. Many people assume that two consecutive quarters of negative economic growth automatically signal a recession. In reality, the determination is made by the NBER’s Business Cycle Dating Committee, a group of prominent economists who evaluate a wide range of variables before reaching a conclusion. These include employment levels, consumer spending, industrial production and income data, among others. The process is detailed and methodical, often taking months to reach an official determination.

Today, that careful analysis has collided with a new cultural force: social media and more specifically, Gen Z. Younger users have begun redefining recession indicators through humor, relatability and personal experience. Instead of tracking GDP or labor statistics, Gen Z points to everyday behaviors as signs of economic stress. Viral videos label trends such as reviving side hustles, cutting back on dining out, thrifting becoming fashionable again, minimalistic makeup routines or the return of budget-friendly fast food as “recession indicators.”