NATIONAL NEWS – Moody’s Zandi warns U.S. is ‘On the Precipice of Recession’ as labor market weakens

Ananya Roy, News Writer

Mark Zandi, chief economist at Moody’s Analytics, is sounding the alarm: the U.S. economy is teetering on the edge of recession. In a series of posts over the weekend, Zandi pointed to weakening consumer spending, declining construction and manufacturing activity, and a broader hiring freeze negatively impacting recent graduates. “With inflation on the rise, it is tough for the Fed to come to the rescue,” he wrote.

Despite low headline unemployment, Zandi says the labor force is stagnating as the foreign-born workforce shrinks and participation rates fall. He attributes much of the economic strain to President Trump’s escalating tariffs and restrictive immigration policies, which he argues are cutting into company profits and household spending power. Even anticipated rate cuts from the Federal Reserve may not be enough to reverse course, Zandi said.

His warning comes on the heels of a disappointing July jobs report that showed just 73,000 new positions added—well below forecasts—and a sharp downward revision to May and June payrolls. “The economy is slowing, and it’s slowing fast,” Zandi said, adding that the data confirms deeper structural problems many observers have underestimated.