Stock Market Crashes
Stock market crashes are probably the best-known — and easily the most dramatic — warning signs of a looming recession. A stock market crash can cause a loss of consumer confidence as people are generally less ready to spend money when their investments are in the tank. That can slow spending and create larger economic problems.
There’s also the psychological effect of the news. The chaos and panic that can grip the country as stocks seem to be falling without knowing where the bottom might be is contagious, especially as the news gets blasted across the headlines.
