Recession alarms are ringing on Wall Street. Here are 4 warnings economists are pointing to.

• Investors and economists have grown concerned about a potential recession this year.
• Prominent bears say a downturn could emerge as early as July.
• Here are four warning signs economic forecasters have flagged recently.

Recession talk is growing louder on Wall Street, and forecasters are pointing to a handful of warning signs that suggest am economic downturn may be on the horizon.

Earlier this month, Goldman Sachs raised its probability of a recession over the next 12 months from 15% to 20%.

According to a March survey conducted by Bank of America, 55% of fund managers said they saw a global recession triggered by a trade war as the top tail risk for the market.

Meanwhile, the number of consumers who said they expected a recession in the next 12 months spiked to a nine-month high, according to the Conference Board's latest Consumer Confidence Survey.

David Rosenberg, an economist and a vocal market bear, said he believes a downturn could strike in the next few months. In a recent note to clients, he pointed to a handful of warnings that suggested the economy was weakening.

"We keep hearing that there is no recession and that the economy is in solid shape because of the low unemployment rate. But it is change and not the level that matters for the economic cycle," Rosenberg said. "If the past is prescient, the recession which nobody believes will rear its ugly head will materialize as early as July."

Here are four warning signs he and other economic forecasters have flagged recently.

1. Household finances are deteriorating

US households are showing signs they're struggling to keep up with the pace of inflation, something that could pose a major headwind to the US economy given that consumer spending makes up around two-thirds of GDP.

Notably, Americans are less likely to be able to cover an emergency expense. According to the latest Survey of Consumer Expectations from the New York Fed, 63% of US households said they had enough cash on hand to cover a surprise $2,000 bill.

According to an analysis from Apollo Global Management, that's the lowest percentage of Americans who said they had emergency cash on had since the fourth quarter of 2015.

"Taking into account that the CPI level today is 35% higher than in 2015, the situation is even worse," Torsten Sløk, the chief economist at Apollo, wrote.

The survey also found that 34% of Americans said they expected to have to come up with $,2000 over the next month.

At the same time, households also have higher debt burdens. Total household debt rose $93 billion over the fourth quarter, hitting a record $18 trillion, New York Fed data shows.

2. Small and mid-cap stocks are doing poorly

Small- and mid-cap stocks have been struggling. The corner of the market looks to be "deep in correction terrain," Rosenberg wrote. That could be a bad indicator for the US, given that small- to mid-cap stocks are highly sensitive to economic changes.

The iShares S&P Small-cap 600 Value ETF is down 16% from its peak in November.

The S&P MidCap 400 is down a similar 13% from its high in November.

"Both peaked within three weeks after the election … honeymoon ended very quickly," Rosenberg added.

3. More companies are warning of weaker earnings

More US companies have been warning investors that guidance for earnings this year is looking slightly weaker than anticipated. Companies viewed as key economic bellwethers, like Walmart, Target, and FedEx have slashed guidance for the year.

According to Rosenberg's analysis, around 70% of companies that have reported earnings this season have cited uncertainty around new policies and the president's tariffs as one reason the outlook could be negative this year.

"US equity futures are flashing red as corporate guidance continues to deteriorate," he said.

4. The bond market is pricing in more risks

Bond investors are pricing in a greater risk that more companies could buckle in the coming years.

Credit spreads, which measure the difference between the yield on corporate bonds over a benchmark like US Treasurys, have risen "substantially" in the last month, according to a note Goldman Sachs released on Friday.

That reflects investors pricing in higher risk that a corporate borrower could struggle to pay back debt.

"We've had a couple of quarters now where spreads were stuck at the very low end of the historical range," Lotfi Karoui, a chief credit strategist at Goldman Sachs Research, said in a podcast last week. "They should gradually go back to levels that are closer to historical medians, to reflect the new reality of elevated macro volatility and incrementally higher recession risk," he added, though he noted that spreads were still far from recessionary levels.

US firms had a 9.2% chance of defaulting at the end of 2024, the highest risk of default since the Great Financial Crisis, according to a Moody's analysis.