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Kolkata: Is the US close to a recession? If the chief economist of rating giant Moody's is to be believed, it certainly is. Mark Zandi, chief economist at Moody’s Analytics, who earlier warned of a jobs recession, has said that the US is "on the edge of recession". "The US economy has entered a jobs recession," he wrote on X on Sunday.
"Based on my assessment of various data, states making up nearly a third of US GDP are either in or at high risk of recession, another third are just holding steady, and the remaining third are growing," he mentioned on social media.
Zandi's red flag follows the report that the economy could manage to add only 22,000 jobs in the whole month of August. Also unemployment rose to a four-year high level of 4.3%. The job gains is August hugely disappointed economists since the projections were almost 75,000.
“It’s clear the job market is struggling,” Mark Zandi, chief economist at Moody’s Analytics, told Fortune. “The economy is on the edge of recession: In fact, we may already be in one. As more revisions come in, it will probably show that employment is declining in a consistent way.” Incidentally, this comes against the backdrop of a demand for rate cuts by the US Fed.
“What’s perhaps most disconcerting about the flagging job market is how dependent it is on healthcare and hospitality for what little job growth is occurring. Since the beginning of the year, the economy has created a paltry 600k jobs, but without the job growth in these industries, there would be zero job growth. Indeed. fewer than half of the industries in the Bureau of Labour Statistics' payroll employment survey have added to payrolls over the past 6 months," Zandi mentioned.
On August 25, Zandi elaborated his apprehension in another post, where he also pointed out the significance of California and New York is the country is to avoid descending in recession. "State-level data makes it clear why the U.S. economy is on the edge of recession. Based on my assessment of various data, states making up nearly a third of U.S. GDP are either in or at high risk of recession, another third are just holding steady, and the remaining third are growing. States experiencing recessions are spread across the country, but the broader DC area stands out due to government job cuts. Southern states are generally the strongest, but their growth is slowing. California and New York, which together account for over a fifth of U.S. GDP, are holding their own, and their stability is crucial for the national economy to avoid a downturn," wrote Zandi.
Official figures, however, pointed to a growth of GDP for the second quarter of this year. Bureau of Economic Analysis data showed that the US economy grew at 3.3% annualised rate in Q2 of 2025. This was a significant rise from the 0.5% contraction in Q1 of 2025.
