Grant Cardone Says Economy Is 'Flashing A Recession Warning' — This Indicator Has Been Right All But Once Over The Last 120 Years

Grant Cardone, CEO of Cardone Capital and author of “The 10X Rule,” has been sounding the alarm about an impending recession for some time. He believes the economy is currently “flashing a recession warning” based on several key indicators.

On April 6, Cardone wrote on X, "The US economy is flashing a recession warning that has only been wrong once in the last 120 years." 

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The recession warning revolves around the Leading Economic Index, according to Business Insider and insights from Lakshman Achuthan, co-founder of the Economic Cycle Research Institute (ECRI), The index historically has signaled an upcoming recession when it begins to decline. Over the past year, the index has shown a downward trend.

In a webcast with Rosenberg Research, Achuthan noted the index's recent plateau but emphasized its historical reliability in forecasting economic downturns. He noted that a decline in the index historically has preceded a recession in every instance over the last 120 years, except for the period following World War II. 

"That, while is not a guarantee of a recession, it certainly is an indication that there's a lot of vulnerability to shocks," he said, highlighting the cyclical vulnerability of the U.S. economy. 

Additional economic data support this cautious outlook, with projected gross domestic product (GDP) growth slowing to 2.5% in the first quarter, according to the Atlanta Fed. The U.S. Coincident Index, another economic health measure, has shown stagnation over the last two years.

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The job market, despite appearing strong, reveals underlying weaknesses. The unemployment rate has reached its highest point in two years as of February. The ECRI Cyclical Labor Conditions Index has seen a dramatic decrease, reminiscent of trends observed before the recessions of 2001, 2008 and the pandemic. These indicators collectively point to an economy at risk, signaling potential headwinds ahead.

Cardone followed the statement by asking, "How are things where you are?" 

The responses from X users painted a mixed economic picture. One user posted, "The middle class knows we are in a recession," reflecting a sentiment of financial strain felt by many. 

Another user highlighted the diminishing value of money, saying, "The $5 bill is the new $1." Another comment read, "Never felt poorer," indicating a personal financial downturn. 

Amid these concerns, not all feedback was grim. A contrasting perspective came from a user who shared a positive note. "Great last year, best year ever for my business. Up 15% over last this year." 

While many economists have pushed back their recession forecasts, Cardone insists on operating as if the downturn has already arrived. His contrarian stance reflects his philosophy of outworking the competition to capitalize on opportunities when others are hesitant.

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