‘Vibecession’ explained: When vibes are down even if the economy isn’t

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😐 Vibes recession

What do frozen pizzas and not buying new underwear have in common? If you ask the internet, they are all indications that we’re in a recession, or at least headed towards one.

But what happens when the economic data seems fine, at least for now? This week, we’ll dive into the origins of various quirky indicators people use to call a recession, and the “vibecession” phenomenon, where public perception tells a different story from the numbers.

In this week’s issue:

• The war against vapes has started
• Bitcoin climbs to a record high
• Are we in a vibes recession?

👃 Something’s off

The economic numbers may seem alright. But talk to fresh grads struggling to find jobs, or young workers watching their spending, and the sentiment feels… off. 

Welcome to what economic commentator Kyla Scanlon calls a “vibecession”. It’s when the public feels like the economy is worse than the numbers say. 

It’s not about gross domestic product (GDP). It’s about rising costs, shaky job prospects, global uncertainty and social media timelines full of people doomposting about their finances.

Online, this dissonance has taken on a life of its own, with the practice of calling everything a “recession indicator” having become a meme catchphrase. 

Lady Gaga being back on the charts? The last time she served this hard, we had an economic recession, says this TikToker. People stealing forks and plates from a hawker centre? It’s a recession indicator. Even Labubu hasn’t been spared. 

🍕 Pizzas, underwear and lipsticks

I did some digging into this and – jokes aside – there may actually be some truth behind these tongue-in-cheek observations. 

Take the pepperoni price index, where higher sales of expensive frozen pizza could indicate that the economy isn’t well. The idea is this: When people cut back on eating out, they don’t buy cheaper food. They trade down from restaurants to the most bougie frozen pizza they can find. 

This played out in the US in 2009, during the Great Recession and during the pandemic, Business Insider reported. 

Alan Greenspan, the longest-serving US Federal Reserve chairman, famously tracked the sales of men’s underwear, which is usually stable. 

However, on the few occasions when sales dipped, that meant that men were so strapped for cash they were deciding not to replace their underwear, he explained. 

Meanwhile, the so-called lipstick effect suggests that people splurge on small luxuries, like beauty products, when they can’t afford bigger purchases. Michael Burry, the investor featured in The Big Short for famously predicting the 2008 crash, recently sold off nearly all of his stock holdings and doubled down on just one: Estée Lauder.

There’s the hemline index, which claims skirts get longer when times are hard. Or that upbeat, bubblegum pop songs tend to dominate the charts during economic downturns as listeners turn to escapism.

🔢 What do the numbers say? 

In the US, economic data is a bit mixed, with some indicators showing strength and others suggesting potential weakness. 

In the first quarter of 2025, real GDP growth was negative, indicating that the economy shrank from the previous quarter. 

It’s worth noting that there’s no official definition for what a recession is. You could say it’s just vibes, though it’s generally understood to be more than a few months of significant and widespread decline in economic activity.

If we’re talking about a technical recession, though, then that’s defined as two consecutive quarters of decline in a country’s real GDP, i.e. GDP that’s been adjusted for inflation. 

If second-quarter results turn out negative, then the US would be in a technical recession. And when the US sneezes, the world catches a cold.

Here in Singapore, official stats suggest that things aren’t that bad.

Singapore’s economy avoided a technical recession in the second quarter, growing 1.4 per cent compared with the first quarter, when GDP contracted by 0.5 per cent. On a year-on-year basis, the economy grew by a better-than-expected 4.3 per cent. Inflation has also cooled.

While there has been growing public attention on the employment struggles of fresh grads, Singapore’s tariff taskforce said that things are actually improving. 

Based on a “very preliminary” Ministry of Manpower study, the employment rate as at June 2025 for fresh grads was 51.9 per cent, marginally higher than the June 2024 rate of 47.9 per cent.

⚖️ Why the vibes matter

While people often bring up recession indicators half-jokingly, they point to a growing sense that people are cutting back, changing financial habits or quietly bracing themselves for one. 

Even the official narratives are one of caution. Despite the surprisingly high Q2 GDP results, the Ministry of Trade and Industry continued to flag “significant uncertainty and downside risks” from tariffs in the second half of the year. 

It didn’t change its official forecast range of 0 per cent to 2 per cent, which was set shortly after America’s “Liberation Day” tariffs, though some economists are expecting the ministry to raise its forecasts soon.

The Monetary Authority of Singapore has also warned that Singapore’s GDP growth is likely to slow as it expects tariffs to drag down global economic activity.

The sentiment is pretty clear. The numbers don’t yet show it, but the caution, hesitation and general “meh” mood is real. 

Kyla Scanlon’s idea of a vibes recession isn’t just a meme. It captures a significant disconnect between the economic recovery reported on paper and the real sense of unease being felt by people everywhere. 

And when enough people feel anxious, they can behave in ways that affect the actual economy.

To some extent, that’s already showing in Singapore. Businesses are more hesitant to hire and bracing for the impact of tariffs. Singaporeans are also tightening their belts when it comes to eating out. 

Globally, more people are heading back to school – which itself is another recession indicator.

Whether or not a downturn is official, the fear of one can feed on itself and turn it into a self-fulfilling prophecy.

For now, take these quirky indicators for what they are – a reflection of public sentiment, not hard economic science. 

How you feel about the economy isn’t irrational. But it isn’t always the full story. Or maybe the vibes just haven’t translated into economic data – yet.

Either way, the advice for preparing for uncertainty remains the same. If you’ve got a job, try to hold onto it and don’t switch unless you have something else lined up. Avoid taking on bad debt. If you’re job-hunting or freelancing, try to shore up an emergency fund and avoid big-ticket commitments.

TL;DR

• Social media’s latest obsession involves labelling everything a recession indicator
• Some, like sales of frozen pizza and men’s underwear, are more reliable indicators that people have used to predict recessions
• Despite the memes, Singapore’s economic numbers show that things aren’t that bad
• However, when enough people feel uncertain, it can change their behaviour in ways that affect the actual economy.

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