With the S&P 500 trading at all-time highs, an under-the-radar economic indicator suggests a widening gap between financial markets and the real economy.
“Who’s lying here?” asked i3Invest CEO Guilherme Tavares, contrasting the S&P 500’s relentless rise with the downturn in the Heavy Truck Index, a moving average of U.S. heavy truck registrations.
Who's lying here?
undefined Guilherme Tavares (@i3_invest) August 25, 2025
The Heavy Truck Index has clearly been signaling a shift in the real economy for months. pic.twitter.com/rN2E9KuV9U
The index is considered a leading economic gauge as declines in truck registrations often foreshadow weakness in freight, logistics, and the broader economy.
“The Heavy Truck Index has clearly been signaling a shift in the real economy for months,” Tavares said.
Historically, downturns in the index preceded major contractions during the 2001 and 2008 recessions, as well as the Covid-era slump.
More broadly, economists have long viewed trucking activity as a bellwether, since roughly 70% of all U.S. freight — from consumer goods to industrial inputs — moves by truck.
The indicator’s downshift comes amid heightened uncertainty around the U.S. economy, with analysts increasingly warning that a recession is becoming more likely in the near future.
Economists sound the recession alarm (again)
Although the U.S. economy has avoided back-to-back quarters of negative GDP growth — sidestepping the immediate risk of a technical recession — economists at Barclays warn that a slowdown is already underway.
The bank assigns a 50% probability of recession within the next two years, pointing to weakening GDP growth and a softening job market. Its key indicators place the odds of the economy stalling anywhere between 47% and 90%.
Moody’s chief economist Mark Zandi says the outlook is already deteriorating, with roughly one-third of the U.S. economy effectively in recession. Hard-hit sectors include transportation, agriculture, mining, manufacturing, and construction.
Another third of the economy — spanning leisure and hospitality, professional services, financial services, and utilities — faces rising risks of contraction.
“No surprise, those industries struggling the most are most impacted by the higher tariffs, highly restrictive immigration policy, and the DOGE cuts,” Zandi said, referring to Trump administration measures he links to the slowdown.
1/3 of the economy's industries are in recession, 1/3 are treading water, and 1/3 are expanding. This underscores why recession is such a threat. The breakdown is in the table. I do take some license in defining industries (primarily in defining the tech industry), and this is my… pic.twitter.com/m39MNRezof
undefined Mark Zandi (@Markzandi) August 17, 2025
Zandi’s concerns are reinforced by the latest ISM Manufacturing PMI data, which showed U.S. goods-producing industries contracting for a fifth straight month in July and for 31 of the past 33 months.
Several managers in the apparel, machinery, metals, furniture, and electrical equipment industries cited tariffs as a major headwind.
“These tariff wars are beginning to wear us out. It’s been very difficult to forecast what we will pay in duties and calculate any cost savings we’ve had this year,” one manager said.
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