(NewsNation) — According to Mark Zandi, chief economist at Moody’s Analytics, the U.S. economy is teetering on the edge of a recession, based on recent economic data released last week.
In a social media update on Monday, Zandi highlighted stagnant consumer spending, shrinking construction and manufacturing sectors, and anticipated job losses as key indicators.
Rising inflation makes it difficult for the Federal Reserve to provide economic stimulus, he said.
While unemployment remains low, Zandi attributed this to declining labor force growth rather than economic strength.
“The foreign-born workforce is shrinking and labor force participation” is falling, he wrote.
An economy-wide hiring freeze affecting recent graduates and declining work hours signal deeper problems, according to Zandi.
Zandi blamed the economic struggles on increasing “U.S. tariffs and restrictive immigration policies.”
He noted that tariffs are further eroding American companies’ profits and consumer purchasing power, while a reduced number of immigrant workers is leading to a “smaller economy.”
Addressing claims that current economic data does not reflect reality, Zandi explained that large revisions to employment figures are typical during economic shifts such as recessions.
“This wasn’t a significant issue when government employment was steady, but now that there is a decline in government jobs, these cuts are becoming evident in the revisions,” Zandi mentioned.
US employers added 73K jobs in July; May and June data slashed 88%
In July, U.S. employers created 73,000 new jobs, falling short of the forecasted 115,000. However, data released by the Labor Department on Friday pointed out a more concerning trend: the job market is weaker than previously perceived.
Downward revisions shaved 258,000 jobs off May and June payrolls, erasing 88% of their previously reported additions. May’s initial estimate of 139,000 jobs was slashed to just 19,000, the steepest revision since March 2021.
Federal Reserve holds rates steady as uncertainty ‘remains elevated’
The Federal Reserve held interest rates steady Wednesday, as officials remain cautious amid a swirl of recent economic data.
The pause marked the Fed’s fifth straight meeting without a rate change, despite mounting pressure from President Donald Trump to ease borrowing costs.
In announcing the decision, policymakers noted that while unemployment remains low and labor market conditions are solid, inflation remains “somewhat elevated.”
“Despite elevated uncertainty, the economy is in a solid position,” Powell said at a press conference, emphasizing the Fed’s dual mandate of maximizing employment while keeping inflation in check.
NewsNation’s Andrew Dorn contributed to this report.
