There's now downside risks to the labor market, says Morgan Stanley's Ellen Zentner
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Yahoo
an hour ago
- Yahoo
Economist Mark Zandi says US is on 'precipice of recession.' How to weather the fallout if — or when — it hits
Mark Zandi, chief economist at Moody's Analytics, raised concerns about the U.S. economy following the Bureau of Labor Statistics' latest report on August 1st. In a post on X, he warned, 'the economy is on the precipice of recession. That's the clear takeaway from last week's economic data dump. Consumer spending has flatlined, construction and manufacturing are contracting, and employment is set to fall. And with inflation on the rise, it is tough for the Fed to come to the rescue.' Just days earlier, Zandi had observed that employment was the 'remaining firewall between the weakening economy and recession.' Don't miss Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 6 of the easiest ways you can catch up (and fast) Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it That firewall appears to be weakening: revisions to May and June job gains cut a combined 258,000 positions, bringing the three-month average increase to just 35,000 — more typical of an early recession than a healthy expansion. The slowdown extends beyond hiring. Consumer spending growth in Q1, housing investment has declined for several months, and manufacturing output is down year-over-year. While Q2 GDP rose 3%, much of that growth came from a drop in imports rather than strong domestic demand. Rising tariff uncertainty is also discouraging hiring and investment. How a downturn ripples through the economy For individuals, a recession often brings job market anxiety. Layoffs and reduced hours typically hit first in sectors sensitive to economic shifts, such as construction, manufacturing, transportation, and retail. However, any future downturn may not be limited to these industries. Advances in AI appear to be reducing demand for some white collar jobs, particularly entry-level positions. Meanwhile, government layoffs in the first half of the year could also weigh on the economy, as affected workers cut back on spending to focus on essentials. Small businesses often feel the pinch just as acutely — and sometimes earlier. When consumers pull back on discretionary spending, revenues decline for restaurants, shops, and service providers. Slower payments from clients and operating costs can quickly create cash flow problems. Businesses without strong reserves or adaptable operating models may be forced to cut staff, delay investments, or shut down altogether. Read more: Nervous about the stock market? Gain potential quarterly income through this $1B private real estate fund — even if you're not a millionaire. Steps you can take now The good news is that there's still time to prepare. Strengthening your financial position starts with improving your ability to handle unexpected financial shocks. Building an emergency fund with at least three months' worth of living expenses can act as a buffer against sudden income loss. If you already have savings, focus on protecting and growing them by avoiding unnecessary withdrawals and keeping funds in low-risk, easily accessible accounts. Debt is another key pressure point to address. Paying down high-interest balances not only frees up more of your income but also limits your exposure to rising borrowing costs if credit tightens. Reviewing your monthly spending and cutting back on non-essential expenses can create extra breathing room in your budget. The earlier you make these adjustments, the less disruptive they will be if your income falls. You might also consider diversifying your income. That could include freelance or contract work, building new skills to improve your marketability, or reconnecting with professional contacts who might open doors to new opportunities. If you run a small business, now may be a good time to bolster your cash reserves and renegotiate supplier terms. The bottom line The U.S. economy hasn't tipped into a formal recession yet, but the warning signs are there. Whether the current slowdown turns into a full-blown downturn will depend on how key trends unfold in the coming months. While you can't control the broader economy, you can control how you respond. Building savings, reducing debt, trimming unnecessary expenses, and strengthening your income are all smart moves. If a recession does materialize, you'll be better prepared to weather the storm. And if it doesn't, you'll still have a stronger, more resilient financial foundation. What to read next Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Here are 5 simple ways to grow rich with real estate if you don't want to play landlord. And you can even start with as little as $10 Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
Expedia Group, Inc. (EXPE) Had A Great Quarter, Says Jim Cramer
We recently published . Expedia Group, Inc. (NASDAQ:EXPE) is one of the stocks Jim Cramer recently discussed. Expedia Group, Inc. (NASDAQ:EXPE) is a travel services provider whose shares have gained 12.9% year-to-date. Over the past month, the shares have gained 14% after rising by 8.9% since the firm's second-quarter earnings. The results saw Expedia Group, Inc. (NASDAQ:EXPE) beat analyst estimates for revenue, earnings, and bookings. Naturally, when his co-host pointed out that Morgan Stanley had added the firm to a list of stocks that would end up suffering because of AI, Cramer was surprised as he commented: 'Expedia just had a great quarter, what are they talking about?' Pixabay/Public domain Here are Cramer's previous thoughts about Expedia Group, Inc. (NASDAQ:EXPE): 'Look, travel's been the biggest engine, okay. It's been the biggest engine of the economy in the last six months. And you can hurt it. I mean we obviously got, we also had some terrible instances with planes. But you can hurt travel and travel's really, . . . Someone upgraded Expedia yesterday, saying things were fine. But I do think that when you take the best bull market we have and you put chinks in it, we should then scramble. We scramble. Because we are running out of places that have bull markets.' While we acknowledge the potential of EXPE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
7 hours ago
- Miami Herald
Gold analyst warns of 2011-style 'blow-off top'
Carley Garner is a long-time futures trader who has seen a thing or two over a career that has lasted over twenty years, including gold market rallies and sell-offs. The massive rally in gold stocks this year to north of $3,357 per ounce has caught her attention, and not in a good way. Gold prices are up over 28% year-to-date in 2025, and the size and speed of the move (and the reasons behind it) remind her of a similar rally 14 years ago in 2011. Back then, the outcome for gold bugs wasn't fun. "The 2011 top was met with a 45% haircut that took nearly a decade to recover," according to Garner. Gold has enjoyed a perfect storm this year as macro crosscurrents hamstring the Fed's monetary policy, GDP slips, and the US debt outlook worsens. Unemployment has risen to 4.2% from 3.4% in 2023, CPI inflation of 2.7% is stubbornly above the Fed's 2% inflation target, the World Bank says GDP is expected to fall to 1.4% from 2.8% last year, and debt experts say the One Big, Beautiful Bill Act passed this year will add $3.4 trillion to the US debt by 2034. Related: Analyst expects gold to fall off the 'Wall of Worry' The risks have hammered the US Dollar, causing the Dollar Index to tumble 10% in 2025. Since gold is priced in USD, the Dollar's struggles have made it more attractive to overseas buyers eager to diversify their holdings away from US Treasuries in protest of President Trump's tariff policy. The significant uncertainty has also made antsy investors far more interested in gold than Treasuries as a safe haven. "Safe haven dollars can purchase gold, an asset that doesn't produce income, at an all-time high without a risk parachute, or they can buy Treasuries at multi-decade lows with a yield of 4% to 5% to cushion downside price risk," said Garner in a TheStreet Pro post. "Ironically, the masses select the former and pass on the latter." Many are indeed giving up on Treasuries' relatively juicy yields, fearing the worst. That may not be the best move, though, for newer gold bugs, given that gold has already rocketed to all-time highs this summer. Troubling times always increase interest in gold, and this isn't the first time that gold has put on a show. In 2011, gold similarly rallied sharply to all-time highs amid uncertainty around major banks and the economy, and aftershocks following the Great Recession, which was still fresh on investors' minds. Related: Major analyst resets gold price target after shocking economic data Remember the S&P cut the US debt rating for the first time in history in August 2011 because of the growing deficit, prompting a massive 5.5% drop in the S&P 500 on Aug. 8. The situation was so bad that Warren Buffett famously back-stopped Bank of America on Aug. 25, providing a cash influx in exchange for preferred stocks and warrants that eventually made Buffett's Berkshire Hathaway a mint when risk assets found their footing and gold lost its luster. "Although gold is known as a safe-haven asset, it has a history of stunning corrections," reminded Garner. "For instance, the 2011 top was met with a 45% haircut that took nearly a decade to recover." Like most investments, momentum can drive assets higher and lower than logic may dictate, making betting against it a risky endeavor. Still, most money is made or lost by acting ahead of the turning points that mark tops and bottoms. Given that gold has already made a major move higher, investors are wise to consider whether we're closer to a top like 2011 than a bottom like a few years ago. More Experts Stocks & Markets Podcast: Sectors to Avoid With Jay WoodsTrader makes bold call with Boeing stock after defense workers strikeVeteran fund manager sends urgent 9-word message on stocks "Gold is an asset that should only be bought when nobody wants it. If everyone is buying it, it's probably too late for anyone with a time horizon of less than a decade or longer," said Garner. There's certainly an argument that gold bullishness is widespread, with many talking positively about it as a hedge worth owning. "If you are looking for bearish analyst calls or news, you won't find it," said Garner. "But don't let this detract you from being skeptical." Gold was panned as a "dead dog acting as a drag to portfolios" three years ago, says Garner. Today, she says, "it is considered a must-hold in those same portfolios." In other words, contrarian thinking, akin to buying when everyone is selling and selling when everyone is buying, may make more sense today regarding gold than three years ago. "Just as conventional thinking was misguided then, it might be wrong today," wrote Garner. Related: Stock market gets 'kick in the pants' from startling inflation report The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
