Top economist sounds alarm: US economy teetering on recession and is on the brink of big trouble
ADVERTISEMENT In an analysis shared on social media, Zandi pointed to a range of warning signs that suggest the country is inching dangerously close to a recession, according to a Franknez Media report.
From weakening consumer spending to a cooling labor market and a slowdown in key industries, Zandi pointed out that the economic data is painting a troubling picture and Americans should be paying attention, as per the report.
He wrote that 'Economic activity is stalling,' as he pointed to declining labor force participation and a shrinking foreign-born workforce as key contributors to the slowdown, as reported by the Franknez Media.Zandi emphasised that consumer spending, the engine that drives about two-thirds of US economic output, has flatlined, and that alone is enough to raise concern, but it's not the only sector flashing red, according to the report.
ALSO READ: Trump orders NASA to kill 2 satellites that can function for many more years - the reason will shock all
ADVERTISEMENT
Even construction and manufacturing are contracting at an alarming rate, reported Franknez Media, citing Zandi's analysis.While the official unemployment rate remains low, Zandi highlighted that it does not reveal all the details. Behind the headline numbers are deeper issues, a shrinking workforce, fewer hours worked, and growing difficulty for new graduates to land jobs, as reported by Franknez Media.
ADVERTISEMENT Hiring freezes are widespread, and the once-strong demand for labor is cooling, a potential sign that employers are bracing for tougher times, according to the report.He pointed out that the foreign-born workers, who have long helped fill labor shortages and drive economic growth, are also leaving the workforce in greater numbers due to restrictive immigration policies, as per the Franknez Media report.
ADVERTISEMENT
ALSO READ: When is Labor Day 2025 in US and what should you know before celebrating?Zandi warned that 'Tariffs are eroding corporate profits and household purchasing power,' adding that reduced immigration is leading to a smaller workforce and, consequently, a smaller economy, as reported by Franknez Media.
ADVERTISEMENT The economist also addressed concerns about the accuracy of recent economic data, arguing that large revisions to employment figures are usual signs during economic turning points, according to Franknez Media.Just like July's job growth was reported at 73,000, which was well below the expected 115,000, and more concerning was the revisions to May and June payrolls removed 258,000 jobs, with May's initial estimate of 139,000 jobs revised down to just 19,000, which is the largest revision since March 2021, as per the report.Meanwhile, the Federal Reserve's decision to hold interest rates steady for the fifth consecutive meeting indicates the delicate balance it must strike, even after pressure from US president Donald Trump to cut borrowing costs, Fed Chair Jerome Powell emphasised the need to manage inflation, which remains 'somewhat elevated,' while supporting employment, as reported by Franknez Media.Powell had said during a recent press conference that, 'The economy is in a solid position, but uncertainty remains elevated,' as quoted in the report.However, even after the dark outlook, prediction market platform Kalshi found that the odds of a US recession has fallen to 14%, down from a high of nearly 70% on May 1, as reported by Franknez Media.These platforms, which allow users to bet on future events, show the shifting sentiment but do not negate the underlying risks highlighted by Zandi and other economists, according to Franknez Media.Is the US in a recession now?Not officially, but several economic indicators suggest we may be close.
What is the Federal Reserve doing? The Fed is keeping interest rates steady but is carefully watching inflation and growth.
(You can now subscribe to our Economic Times WhatsApp channel)
(Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.)
Download The Economic Times News App to get Daily International News Updates.
NEXT STORY
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
4 hours ago
- Time of India
As electric bills rise, evidence mounts that data centers share blame. States feel pressure to act
By Marc Levy HARRISBURG, Pa.: Amid rising electric bills, states are under pressure to insulate regular household and business ratepayers from the costs of feeding Big Tech's energy-hungry data centers. It's not clear that any state has a solution and the actual effect of data centers on electricity bills is difficult to pin down. Some critics question whether states have the spine to take a hard line against tech behemoths like Microsoft , Google , Amazon and Meta . But more than a dozen states have begun taking steps as data centers drive a rapid build-out of power plants and transmission lines. That has meant pressuring the nation's biggest power grid operator to clamp down on price increases, studying the effect of data center s on electricity bills or pushing data center owners to pay a larger share of local transmission costs. Rising power bills are "something legislators have been hearing a lot about. It's something we've been hearing a lot about. More people are speaking out at the public utility commission in the past year than I've ever seen before," said Charlotte Shuff of the Oregon Citizens' Utility Board, a consumer advocacy group. "There's a massive outcry." Not the typical electric customer Some data centers could require more electricity than cities the size of Pittsburgh, Cleveland or New Orleans, and make huge factories look tiny by comparison. That's pushing policymakers to rethink a system that, historically, has spread transmission costs among classes of consumers that are proportional to electricity use. "A lot of this infrastructure, billions of dollars of it, is being built just for a few customers and a few facilities and these happen to be the wealthiest companies in the world," said Ari Peskoe , who directs the Electricity Law Initiative at Harvard University. "I think some of the fundamental assumptions behind all this just kind of breaks down." A fix, Peskoe said, is a "can of worms" that pits ratepayer classes against one another. Some officials downplay the role of data centers in pushing up electric bills. Tricia Pridemore , who sits on Georgia's Public Service Commission and is president of the National Association of Regulatory Utility Commissioners, pointed to an already tightened electricity supply and increasing costs for power lines, utility poles, transformers and generators as utilities replace aging equipment or harden it against extreme weather. The data centers needed to accommodate the artificial intelligence boom are still in the regulatory planning stages, Pridemore said, and the Data Center Coalition, which represents Big Tech firms and data center developers, has said its members are committed to paying their fair share. But growing evidence suggests that the electricity bills of some Americans are rising to subsidize the massive energy needs of Big Tech as the U.S. competes in a race against China for artificial intelligence superiority. Data and analytics firm Wood Mackenzie published a report in recent weeks that suggested 20 proposed or effective specialized rates for data centers in 16 states it studied aren't nearly enough to cover the cost of a new natural gas power plant. In other words, unless utilities negotiate higher specialized rates, other ratepayer classes - residential, commercial and industrial - are likely paying for data center power needs. Meanwhile, Monitoring Analytics , the independent market watchdog for the mid-Atlantic grid, produced research in June showing that 70% - or $9.3 billion - of last year's increased electricity cost was the result of data center demand. States are responding Last year, five governors led by Pennsylvania's Josh Shapiro began pushing back against power prices set by the mid-Atlantic grid operator, PJM Interconnection, after that amount spiked nearly sevenfold. They warned of customers "paying billions more than is necessary." PJM has yet to propose ways to guarantee that data centers pay their freight, but Monitoring Analytics is floating the idea that data centers should be required to procure their own power. In a filing last month, it said that would avoid a "massive wealth transfer" from average people to tech companies. At least a dozen states are eyeing ways to make data centers pay higher local transmission costs. In Oregon, a data center hot spot, lawmakers passed legislation in June ordering state utility regulators to develop new - presumably higher - power rates for data centers. The Oregon Citizens' Utility Board says there is clear evidence that costs to serve data centers are being spread across all customers - at a time when some electric bills there are up 50% over the past four years and utilities are disconnecting more people than ever. New Jersey's governor signed legislation last month commissioning state utility regulators to study whether ratepayers are being hit with "unreasonable rate increases" to connect data centers and to develop a specialized rate to charge data centers. In some other states, like Texas and Utah, governors and lawmakers are trying to avoid a supply-and-demand crisis that leaves ratepayers on the hook - or in the dark. Doubts about states protecting ratepayers In Indiana, state utility regulators approved a settlement between Indiana Michigan Power Co., Amazon, Google, Microsoft and consumer advocates that set parameters for data center payments for service. Kerwin Olsen, of the Citizens Action Council of Indiana, a consumer advocacy group, signed the settlement and called it a "pretty good deal" that contained more consumer protections than what state lawmakers passed. But, he said, state law doesn't force large power users like data centers to publicly reveal their electric usage, so pinning down whether they're paying their fair share of transmission costs "will be a challenge." In a March report, the Environmental and Energy Law Program at Harvard University questioned the motivation of utilities and regulators to shield ratepayers from footing the cost of electricity for data centers. Both utilities and states have incentives to attract big customers like data centers, it said. To do it, utilities - which must get their rates approved by regulators - can offer "special deals to favored customers" like a data center and effectively shift the costs of those discounts to regular ratepayers, the authors wrote. Many state laws can shield disclosure of those rates, they said. In Pennsylvania, an emerging data center hot spot, the state utility commission is drafting a model rate structure for utilities to consider adopting. An overarching goal is to get data center developers to put their money where their mouth is. "We're talking about real transmission upgrades, potentially hundreds of millions of dollars," commission chairman Stephen DeFrank said. "And that's what you don't want the ratepayer to get stuck paying for."
News18
6 hours ago
- News18
'Effect Of Trump's Tariffs': Instagram User Exposes Clothing Price Hikes At Walmart
Last Updated: In the video, Chandler walks through Walmart, pointing to clothing tags that appear to have their original prices removed or covered up An Instagram user has shared a video from inside a Walmart store in the US, claiming that President Donald Trump's tariffs, which came into effect on 1 August, are directly causing noticeable price increases on clothing and other everyday items. The user, Mercedes Chandler, who has over 527,000 followers, posted the video on 1 August, and it has since gone viral on the platform. In the clip, captioned 'Donald Trump's tariffs are in full swing!", Chandler walks through Walmart, pointing to clothing tags that appear to have their original prices removed or covered up. 'Guys, the tariffs are in active effect," Chandler says. 'Look at these clothes in Walmart. All the tags have these bottom pieces ripped off, but then you find one with the bottom still on — $10.98. The price is raised to $11.98." 'This is the effect of Donald Trump's tariffs." Chandler continues, showing a child's outfit marked up from $6.98 to $10.98, and a backpack that previously sold for $19.97, now priced at $24.97. 'That is a $4 increase," Chandler points out, adding that many price tags have been replaced with stickers to hide the original price. 'If you don't believe me, go to your local — whether it be Walmart or Target — and check this out for yourself," Chandler says in the video. The post has triggered a wave of reactions on the platform. One user commented: 'Well MAGA… are you winning yet?" Another added sarcastically, 'Wasn't China supposed to pay those tariffs?" A Target employee also chimed in, 'We also are taking the perforated price tags off the clothing starting a few days ago." 'I am not getting they are imposing high tarrif on china and india but their price increased. Can some one explain me?," another confused user asked. What Are Trump's Tariffs? As part of his current economic policy, President Donald Trump has reintroduced or expanded tariffs on a wide range of imports. The goal, according to Trump, is to protect American jobs, boost domestic manufacturing, and reduce the US trade deficit. Trump argued that these tariffs make foreign goods more expensive, encouraging Americans to buy locally made products. However, in practice, many retailers — including giants like Walmart and Target — pass the extra costs on to consumers, resulting in higher prices on store shelves. Economists have long debated the effectiveness of tariffs. While the Trump administration claims they protect national interests and promote growth, critics argue they lead to inflation, supply chain disruption, and higher costs for American families. News18's viral page features trending stories, videos, and memes, covering quirky incidents, social media buzz from india and around the world, Also Download the News18 App to stay updated! view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
United News of India
6 hours ago
- United News of India
Trump calls for Intel boss to resign immediately, alleging China ties
Washington, Aug 9 (UNI) US President Donald Trump has demanded that the head of US chipmaker Intel should resign "immediately", accusing him of having ties to China. In a social media post, Trump said Lip-Bu Tan was "highly conflicted", apparently referring to his alleged investments in companies that the US says are tied to the Chinese military. It is unusual for a president to demand the resignation of a corporate executive, BBC reported. In a note to staff, Mr Tan pushed back against the criticism as "misinformation". "I have always operated within the highest legal and ethical standards," he said of his more than 40-year career in the US. Mr Tan, a US citizen born in Malaysia and raised in Singapore, is a venture capitalist well-known for his expertise in the semiconductor industry. He was appointed in March to turn around Intel, a pioneer of the US chips industry that has more recently fallen behind competitors. The tech giant has received billions of dollars from the US government as part of the effort to rebuild US semiconductor manufacturing. Shares in Intel fell more than 3% on Thursday after the attack from Trump, who has been critical of the firm previously and is preparing to raise tariffs on the chip industry. "The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem," Trump wrote. It is not illegal for Americans to invest in Chinese firms. Trump's attack took up concerns aired by Republican Senator Tom Cotton this week in a letter to Intel's board that said Mr Tan's "associations raise questions about Intel's ability" to be a "responsible steward of American taxpayer dollars and to comply with applicable security regulations". Cotton pointed to Mr Tan's role as the longtime chief executive of tech firm Cadence Design Systems, which pleaded guilty in July and agreed to pay $140m over US charges that its subsidiary in China had repeatedly done business with the country's National University of Defense Technology, violating US export controls. Mr Tan himself was not indicted. "Intel, the board of directors and Lip-Bu Tan are deeply committed to advancing US national and economic security interests," Intel said in a statement on Thursday, adding that it was making significant investments in the US aligned with Trump's "America First agenda". "We look forward to our continued engagement with the administration." In a recent update to investors, Mr Tan had said the firm would be scaling back its investments in manufacturing, including in the US, to match demand from customers. Intel has already cut thousands of jobs this year as part of an effort to "right-size" the firm. Responding to critics who said Trump had gone too far, the White House told the BBC: "President Trump remains fully committed to safeguarding our country's national and economic security. This includes ensuring that iconic American companies in cutting-edge sectors are led by men and women who Americans can trust." Mr Tan's ties to China had been spotlighted in a 2024 congressional report examining links between US investment firms and Chinese businesses. UNI RN
