US Economy at Risk: 3 Warning Signs of Imminent Recession

Mark Zandi, chief economist at Moody's Analytics, is warning of potential recession signs in the US economy. He cites payroll employment growth stalling, over half of US industries cutting jobs, and a decline in consumer spending as warning signs. While the economy has not yet met the technical definition of a recession, Zandi believes these indicators suggest a downturn could be closer than many think.

Mark Zandi, chief economist at Moody's Analytics, has issued a cautionary warning about potential recession signs in the US economy. In a recent thread on social media, Zandi highlighted several concerning trends that suggest a downturn could be closer than many anticipate.

Stalled Payroll Employment Growth

At the top of Zandi's list is the stalling of payroll employment growth. This is a critical measure used by the National Bureau of Economic Research (NBER) to determine when recessions begin and end [1]. While employment numbers have not yet declined, growth has nearly halted since May. Recent revisions to job reports have consistently been lower, raising concerns that initial data may be overestimating job growth [1].

Over Half of US Industries Cutting Jobs

Zandi also points to the fact that more than half of the 400 industries tracked are cutting jobs. Historically, when more than 50% of industries report job cuts, it has been a reliable indicator of a recession [1]. In July 2025, over 53% of industries reported job cuts, with only the healthcare sector showing employment growth [1].

Decline in Consumer Spending

Additionally, Zandi mentions a decline in consumer spending as a potential warning sign. While not explicitly stated in the provided materials, this indicator is often cited in discussions about economic downturns.

Economic Tides Could Shift

Zandi concluded that while the US economy is not yet in a recession, the economic tides could shift if policy weighs on growth. He noted that Trump's policies, mainly tariffs and immigration, are significant drivers of his view that the economy is teetering at the edge of a downturn [2].

Conclusion

Despite the economy not meeting the technical definition of a recession, Zandi's indicators suggest that a downturn could be closer than many think. Payroll employment growth stalling, over half of US industries cutting jobs, and a decline in consumer spending are all concerning trends that investors and financial professionals should monitor closely.

References

[1] https://economictimes.indiatimes.com/news/international/us/us-recession-2025-warning-signs-red-flags-for-the-economy-economist-points-to-3-warning-signs-of-an-imminent-recession-in-us/articleshow/123287848.cms
[2] https://www.businessinsider.com/is-the-us-in-recession-jobs-unemployment-mark-zandi-2025-8