Walmart signals a red light! American economic recession signal spikes to the level of the 2008 crisis.

Senior strategist Jim Paulsen's tracking indicators related to Walmart Inc. (WMT.US) stocks show that the U.S. economy is about to sharply decline. The Walmart Inc. Recession Signal (WRS) measures the performance of this retail giant's stock (up 10.9% from the beginning of the year) compared to the S&P Global, Inc. Luxury Goods Index (SPGLGUN, down 14.8% from the beginning of the year). Paulsen believes that the sharp rise in the WRS index may signal a potential economic recession or slowdown, similar to the situation before the past four U.S. economic recessions. The WRS is currently approaching its highest level on record, which occurred during the 2008-09 financial crisis. "As retail purchasing trends shift towards discount stores, the WRS increasingly shows caution towards the U.S. economy, indicating that pressure on low to middle-income consumers may be increasing," Paulsen wrote in his latest brief. "I estimate that the economy will avoid a recession this year, but I am increasingly convinced that the U.S. economy is undergoing a severe slowdown, ultimately requiring additional economic policy loosening measures and rate cuts to curb this trend," he warned. The recent increase in the WRS suggests that economic pressures in the U.S. are "spreading from the bottom of income distribution" and may "indicate increasingly serious problems in the private credit market." Regarding the U.S. labor market, Paulsen emphasized that the WRS significantly rose before the unemployment rate spiked in the late 1990s. This indicates that the recent increase in the WRS may not yet be reflected in unemployment rate data. The latest financial report released by Walmart Inc. in February 2026 supports this signal. Firstly, high-income earners are entering: Walmart Inc. management noted that the growth in its market share mainly comes from households with annual incomes exceeding $100,000, indicating that the middle class is also accelerating its shift towards discount stores. Secondly, low-income earners are under pressure: households with annual incomes below $50,000 show clear signs of "cutting expenses", with many living in a tight balance from one paycheck to another. Despite exceeding expectations, Walmart Inc.'s guidance for the 2027 fiscal year is very cautious, implying a reserved attitude towards consumer resilience.