As the S&P 500 continues to print new highs and the market digests the latest AI IPO debut, it may be overlooking two corners of the economy flashing warning signs — pawnshops and fast food.
Together, these segments suggest the U.S. may already be in a recession at the bottom of the income ladder. Yet, it is one largely invisible to the markets, still anchored to the top-line corporate growth.
A clear late-cycle signal is showing up in pawn loan portfolios. Operators like EZCORP, Inc. (NASDAQ:EZPW) and FirstCash Holdings, Inc. (NASDAQ:FCFS) effectively serve as liquidity providers for unbanked and underbanked consumers. Their latest earnings look less like cyclical growth and more like distress indicators.
FirstCash posted record consolidated receivables of $851 million. The domestic same-store pawn loan growth surged 19%. Meanwhile, EZCORP marked a 93% jump in net income, alongside 46% revenue growth. Its average U.S. pawn loan rose to $240, up 16% year over year.
The Next Step
Given jewelry’s role in the pawn ecosystem, bulls can point to soaring gold prices as a convenient explanation. Higher collateral translates into higher loans …