Michael Eisenga, President and CEO of First American Properties, is sounding the alarm about troubling economic signals that could cause further turbulence for the U.S. markets and economy. Recent economic data suggests a potential downturn ahead, with key indicators showing signs of growing instability.

According to the University of Michigan's Consumer Sentiment Survey, consumer confidence plummeted from 71.7 in January to 64.7 in February, highlighting rising pessimism among consumers. The Pending Home Sales Index (PHSI) followed suit, dropping 4.6% in January to a historic low of 70.6, marking a 5.2% decline from the previous year. These signs reflect a broader trend of cautious sentiment, which Eisenga believes could have far-reaching implications.

Corporate caution is also on the rise, with Warren Buffett's cash holdings nearing $350 billion, signaling concerns about economic uncertainty. A 0.9% decline in consumer spending in January, the largest drop since March 2023, adds further worry to an already fragile economic landscape. Additionally, mortgage delinquencies spiked to 5.9% in January, with overall delinquencies surpassing 8%, signaling growing financial strain across households.

The outlook for the markets remains grim, with potential impacts reverberating through the broader economy. The Atlanta Fed's GDPNow model has revised down its growth projection to -2.8% for the current quarter, while corporate bankruptcies are expected to increase by 9–12% in 2025. Personal bankruptcies already saw a 14.2% rise in 2024, and subprime auto loan delinquencies are at their highest level since data collection began.

Eisenga highlights that consumer debt has surged to an alarming $18.04 trillion, with record high credit card debt at $1.21 trillion. Inflation continues to erode incomes, and while holiday spending saw slight growth, discretionary spending is expected to fall as inflation takes a bigger toll.

"These are unsettling times for the U.S. economy, and we must prepare for potential challenges in the year ahead," said Eisenga. "The housing, employment, and Stock markets could face significant strains as economic pressures mount."