{
  "id": 5366920,
  "title": "Legendary economist Gary Shilling says consumer signals point to a recession in the next 12 months",
  "url": "https://urgent.news/2026/09/03/legendary-economist-gary-shilling-says-consumer-signals-point-to-a",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-03T16:46:18.000Z",
  "source": {
    "name": "Business Insider",
    "slug": "business-insider",
    "url": "https://www.businessinsider.com/recession-outlook-warning-signs-us-consumer-spending-economy-gary-shilling-2026-9"
  },
  "original_language": "en",
  "account": "Renowned economist Gary Shilling warns that the United States may be headed for a recession within the next 12 months. Shilling, a Stanford economist and former Merrill Lynch executive, is increasingly convinced that the country is on the brink of economic turmoil. He cites multiple factors, including consumer behavior and financial stress as key indicators of an impending downturn.\n\nOne of the most alarming signs for Shilling is the steep decline in retail sales. In July, retail sales dropped by 0.6%, marking the worst monthly decline in nearly a year. This downturn in consumer spending has been attributed to the high cost of living, particularly in energy prices and borrowing expenses. Americans are becoming more cautious with their wallets as they face mounting financial pressures.\n\nShilling believes that the US consumer is showing warning signs of an economic slowdown. According to a recent survey, 71% of middle-income Americans feel like they are falling behind in keeping up with living expenses, and 59% expect the economy to worsen over the next year. These sentiments are further compounded by the fact that 32% of middle-income Americans reported an increase in credit card debt in the last quarter.\n\nAnother concerning trend is the increase in personal debt. Household and nonprofit consumer credit liabilities reached a record $5.1 trillion by the end of the first quarter. Moreover, bankruptcy filings have surged by 12% over the past year, with a growing number of Americans seeking relief from overwhelming debt burdens. The personal savings rate has also plummeted, with Americans now saving only 3% of their disposable income, down from over 9% in 2021.\n\nShilling highlights the impact of these consumer signals on the overall economy. Since consumer spending accounts for roughly two-thirds of GDP, a slowdown in consumer behavior can have a significant ripple effect on the nation's economic growth. Despite the looming recession, Shilling cautions against expecting the typical cyclical downturn, as the current climate may feature a more severe form of economic contraction, known as stagflation. In this scenario, high inflation persists alongside slowing growth and high unemployment, making it even more challenging for policymakers to implement effective measures to stimulate the economy.",
  "summary": "Gary Shilling says he sees a 60% to 70% chance of a US recession in the next year, pointing to red flags waving among American consumers.",
  "key_points": [
    "Gary Shilling predicts US recession within next 12 months",
    "Retail sales dropped 0.6% in July, worst decline in nearly a year",
    "71% of middle-income Americans feel behind in living expenses"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}