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Time of India
a day ago
- Business
- Time of India
Over half of US industries are cutting jobs, and history says a recession could be next
The U.S. economy is sending increasingly alarming signals as more than half of key industries cut jobs in July 2025, fueling growing concerns among economists and investors about an impending recession. After years of steady growth, the sudden spike in layoffs across manufacturing, retail, and construction sectors marks a sharp reversal — one that experts say could be a leading indicator of broader economic trouble ahead. Why are job losses climbing sharply in major U.S. industries? July's labor reports reveal a widespread contraction: manufacturing shed 11,000 jobs following losses in prior months, retail job cuts skyrocketed by 249% year-over-year, and construction layoffs intensified amid cooling demand. Healthcare stands out as the lone sector still adding workers, but its growth is not enough to offset the broader decline. Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Economist Mark Zandi of Moody's Analytics highlights the significance: 'Payroll employment growth has stalled, and downward revisions to previous months' data confirm weakening momentum beneath the surface.' He stresses that employment trends often presage economic shifts — and these recent layoffs are sending a clear warning. How could rising job cuts affect the U.S. economic outlook? Despite a robust 3% GDP gain in the second quarter, the labor market slowdown threatens to undercut consumer spending, which drives nearly 70% of the U.S. economy. As layoffs rise, households may tighten their belts, dampening demand and slowing growth further. Labor force participation rates are also slipping, as uncertainty pushes some workers to leave the job market altogether. The Federal Reserve is reportedly eyeing interest rate cuts to cushion the blow, but monetary policy typically takes months to ripple through the economy. Live Events Are policymakers ready to tackle a looming recession risk? Federal Reserve Chair Jerome Powell has underscored the central role of a healthy job market in sustaining economic expansion. The Fed's anticipated rate cuts aim to encourage borrowing and investment, but experts caution these moves may not fully take effect soon enough to prevent a downturn. Meanwhile, businesses are increasingly cautious, pausing hiring and scaling back expansion plans amid uncertainty over future demand. This collective retrenchment risks deepening the slowdown if not addressed promptly. What do experts predict about the timing and likelihood of a recession? Views among economists vary, but caution prevails. Mark Zandi warns a recession is 'increasingly probable,' though pinning down an exact timeline remains difficult. Others point to pockets of resilience, particularly in technology and services, that might soften the blow or delay a full downturn. Ultimately, the U.S. economy's trajectory will hinge on consumer confidence, global trade dynamics, and the Federal Reserve's policy effectiveness. But rising layoffs and flat payroll growth are unmistakable red flags signaling that more challenging times may lie ahead. How should Americans prepare as recession fears grow? With job losses spreading and hiring stalls becoming more common, workers and households should brace for tighter budgets and shifting job markets. Policymakers and businesses alike face pressure to act decisively to stabilize growth and protect the economy's recovery. The coming months will reveal whether the Federal Reserve's policy shifts and fiscal measures can steer the nation away from recession — or if the U.S. is entering a tougher economic chapter. FAQs: What are the key recession warning signs in the U.S. right now? Stalled payroll growth , increasing layoffs in manufacturing, retail, and construction, along with declining labor force participation, are core signals economists watch closely. How do job losses in critical sectors impact the economy? Layoffs in industries tied to consumer demand, like retail and construction, often signal slowing spending, which can trigger broader economic contractions.
The Hill
a day ago
- Business
- The Hill
60 percent blame Trump for high costs amid expensive Air Force One, ballroom projects
The U.S. economy isn't in a recession — yet. And hopefully, it won't be. But according to Moody's Analytics chief economist Mark Zandi, the number of industries cutting back on headcount is … well, concerning. Meanwhile, Americans are struggling — grappling with debt, the rising cost of living, and a general sense that their dollar just isn't going far enough. And they're not just blaming 'the economy' in the abstract. Six out of 10 Americans say the Trump administration is driving up their cost of living, according to a new Morning Consult poll. But there's one person who doesn't seem to be feeling the pinch. President Donald Trump is spending millions of dollars and accepting literal gold gifts, which feels wildly out of touch with everyday Americans. Last week, Donald Trump received a glass disc with a 24-karat gold base from Apple CEO Tim Cook. Earlier this year, he accepted a $400 million jet from the Qatari royal family, worth over 100 times more than all foreign gifts given to U.S. presidents combined since 2001. And get this: it could cost up to $1 billion to renovate. He's also reimagined the Oval Office, drenching it in gold, from the stars surrounding the presidential seal on the ceiling to the statues on the fireplace mantel. And it emerged last week that Trump intends to build an enormous $200 million ballroom for hosting official receptions — one of the biggest White House projects in more than a century. Take a look: 'So we'll start in two months maybe, two and a half months, and we'll have it completed in less than two years. It's a very incredible structure — a lot of it's interior work, it's gonna be beautiful, because normally I can build a building like that in four, five months, but it's very intricate, beautiful, beautiful — the best marbles.' And who's paying for this? White House officials say Trump and 'unspecified donors.' If it's a gift, it could raise both ethical and legal questions, potentially violating the Foreign Emoluments Clause of the U.S. Constitution or the Foreign Gifts and Decorations Act, which exists to block this type of thing. Democrats are skeptical. Senate Minority Leader Chuck Schumer said at a press briefing, 'Listen, I'm happy to eat my cheeseburger at my desk. I don't need a $200 million ballroom to eat it in. OK?' And many Americans feel the same. Sure, White House upgrades might look impressive. And yes, gold gifts make for great photo ops. But while the president is basking in marble and chandeliers, millions of Americans are just trying to make rent, keep groceries on the table and pay off their credit cards. When the person in the highest office is spending and receiving millions frivolously, while the rest of the country is tightening its belt, it's not just bad optics — it's a reminder of exactly how far removed our leaders can be from the lives of the people they represent.
Economic Times
05-08-2025
- Business
- Economic Times
Top economist sounds alarm: US economy teetering on recession and is on the brink of big trouble
Synopsis US recession 2025: The United States economy is facing potential recession risks, warns Moody's Analytics chief economist Mark Zandi, citing weakening consumer spending and a cooling labor market. Manufacturing and construction sectors are shrinking, while revised job growth data reveals alarming employment drops. Despite low unemployment, deeper labor market issues persist. US recession 2025: The US economy may be headed for rocky times ahead, as it is showing troubling signs of an impending recession, warned Mark Zandi, chief economist at Moody's Analytics, as per a report. 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 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 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 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 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 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 had said during a recent press conference that, 'The economy is in a solid position, but uncertainty remains elevated,' as quoted in the 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 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 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
Time of India
05-08-2025
- Business
- Time of India
Top economist sounds alarm: US economy teetering on recession and is on the brink of big trouble
US recession 2025: The US economy may be headed for rocky times ahead, as it is showing troubling signs of an impending recession, warned Mark Zandi, chief economist at Moody's Analytics, as per a report. US Consumer Spending Flatlines, Raising Recession Concerns 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. 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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. Live Events ALSO READ: Trump orders NASA to kill 2 satellites that can function for many more years - the reason will shock all Manufacturing and Construction Sectors Are Shrinking Fast Even construction and manufacturing are contracting at an alarming rate, reported Franknez Media, citing Zandi's analysis. Low Unemployment Masks Deeper Labor Market Weakness 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. 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. ALSO READ: When is Labor Day 2025 in US and what should you know before celebrating? Tariffs Are Hurting Corporate Profits and Consumer Budgets 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. Revised Job Growth Data Reveals Alarming Drop in Employment 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. The Federal Reserve's Cautious Stance 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. Recession Odds Have Dropped, But Don't Relax Yet 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. FAQs 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. Economic Times WhatsApp channel )
Newsweek
05-08-2025
- Business
- Newsweek
US on 'Precipice of Recession,' Warns Leading Economist
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A leading economist believes that recent reports on the health of the U.S. economy point to an impending downturn. "The economy is on the precipice of recession. That's the clear takeaway from last week's economic data dump," Moody's Chief Economist Mark Zandi posted to X on Sunday. "Consumer spending has flatlined, construction and manufacturing are contracting, and employment is set to fall." Why It Matters Zandi has sounded several similar alarms about the state of the U.S. economy in recent months, and the risks of a recession, which he has attributed largely to the trade policies of the administration and viewed as exacerbating more long-term vulnerabilities. What To Know Last week saw a tranche of key economic data published by various government agencies. America's trade deficit narrowed in June, consumer sentiment measures for July improved modestly following months of declines, and gross domestic product (GDP) growth rebounded sharply in the second quarter from a troubling contraction in the first, according to an advance estimate from the Department of Commerce. However, as Zandi noted, other indicators were less encouraging. Manufacturing activity slowed in July, job openings in June fell by a greater-than-expected 275,000 and consumer spending, though growing, still lags behind the robust growth seen in 2024. Much of this data was eclipsed by Friday's employment report from the Bureau of Labor Statistics (BLS). This revealed that the U.S. economy added 73,000 jobs in July, well below forecasts. In addition, revisions to May and June's figures showed that employment during these months was 258,000 lower than previously reported. Moody's Analytics Chief Economist Mark Zandi speaks with reporters after a Senate Budget Committee hearing on debt ceiling legislation on Capitol Hill May 4, 2023. Moody's Analytics Chief Economist Mark Zandi speaks with reporters after a Senate Budget Committee hearing on debt ceiling legislation on Capitol Hill May 4, 2023. Francis Chung/POLITICO via AP Images The substantial revision led President Donald Trump to say that the figures had been "RIGGED in order to make the Republicans, and ME, look bad," and he immediately fired BLS Commissioner Erika McEntarfer. The White House has defended McEntafer's dismissal by pointing to perceived aberrations in both this and previous employment reports during her leadership, considering such large revisions "hard evidence" of politically motivated data manipulation. But the move has been roundly criticized by Democratic lawmakers and certain Republicans, with many warning this sets a dangerous precedent for political interference in statistical reporting and will erode trust in the bureau's future work. "Any notion that the economic data misrepresents the reality of how the economy is performing is way off base," Zandi wrote on Sunday. "The data always suffers big revisions when the economy is at an inflection point, like a recession. It's thus not at all surprising that we are seeing big downward revisions to the payroll employment numbers." He added that cuts to the federal workforce by the Department of Government Efficiency (DOGE) were a "key factor" in the BLS revisions, given that government departments are often late in reporting payrolls to the bureau. What People Are Saying Moody's Chief Economist Mark Zandi, via X: "It's no mystery why the economy is struggling; blame increasing U.S. tariffs and highly restrictive immigration policy. The tariffs are cutting increasingly deeply into the profits of American companies and the purchasing power of American households. Fewer immigrant workers means a smaller economy." Economist Jared Bernstein wrote on Monday: "It's not that the BLS did something wrong. It's that, as usual, they did something right. They got new data with which they updated/revised the old data. The fact that the revision was history large and negative just tells us that the labor market was a lot weaker than we thought it was." He added that the downward revision does "not necessarily" mean the U.S. is headed for a recession, but that weak consumer spending and investor demand will continue to weigh on economic growth and labor market health. White House press secretary Karoline Leavitt said following last week's GDP reading: "Today, GDP growth came in above market expectations, and yesterday, consumer confidence rose. Americans trust in President Trump's America First economic agenda that continues to prove the so-called 'experts' wrong. President Trump has reduced America's reliance on foreign products, boosted investment in the U.S., and created thousands of jobs—delivering on his promise to Make America Wealthy Again." What Happens Next? As Zandi noted in his post, resilient labor market conditions had been one of the key factors factors undergirding the Federal Reserve's wait-and-see approach, and holding off on rate cuts while it works to get a clearer grasp on inflationary pressures. But, with inflation still ticking above its 2 percent target, he said "it is tough for the Fed to come to the rescue." On Friday, Goldman Sachs Chief Economist Jan Hatzius said the troubling revisions to recent jobs data made it "very, very likely" the central bank would cut rates at its September meeting.
