U.S. Economy Showing Alarming Signs of Weakness
A growing body of economic data suggests that the U.S. economy may be teetering on the brink of a recession, according to Mark Zandi, chief economist at Moody’s Analytics. In a string of posts on X (formerly Twitter), Zandi outlined how weakening job growth, flat consumer spending, and shrinking industrial activity signal an impending downturn.
“The economy is on the precipice of recession. That’s the clear takeaway from last week’s economic data dump,” Zandi wrote.
“Consumer spending has flatlined, construction and manufacturing are contracting, and employment is set to fall.”
These warnings come just days after a disappointing U.S. jobs report, which compounded growing fears that momentum is slowing across multiple sectors of the economy.
Jobs Data Paints a Gloomy Picture
The July employment numbers were a major red flag. U.S. payrolls expanded by just 73,000, falling far short of economists’ forecasts of 100,000. Even more alarming were massive downward revisions to previous months: May’s job gains were cut from 144,000 to 19,000, and June’s from 147,000 to 14,000.
These sharp revisions bring the three-month average to just 35,000, a level that’s historically associated with an economic turning point.