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Daily Mail
a day ago
- Business
- Daily Mail
Telling sign the US is headed for a recession
Advertisement More than half of US industries are already cutting jobs — a glaring red flag that a recession is near, a leading economist has warned. Moody's Analytics chief economist Mark Zandi said that, although the country hasn't officially entered a downturn, cracks are widening in the jobs market. He said on X that 'far and away' the most important recession indicator is 'payroll employment.' 'If employment declines for more than a month consecutively, we are in a downturn,' he wrote. Though payrolls haven't fallen yet this time, growth has stalled since May — and recent data revisions suggest employment could already be shrinking. The most recent federal jobs reports showed hiring for May and June was much lower than initially thought. On that basis, the report for July is expected to show a decline. 'It wouldn't be surprising if we learn with the coming revisions that employment is already declining,' he explained. Zandi's warning comes a week after a report showed layoffs have risen 140 percent from a year ago. Zandi said that historically, it's not clear exactly when a recession starts until well after the fact. However, he added that 'in the past, if more than half the 400 industries in the payroll survey were shedding jobs, we were in a recession. In July, over 53% of industries were cutting jobs, and only healthcare was adding meaningfully to payrolls.' Zandi also issued a terrifying 'red flare' warning to homeowners last month. A 'red flare' warning suggests the market is experiencing major instability and a fall is imminent. 'I sent off a yellow flare on the housing market in a post a couple of weeks ago, but I now think a red flare is more appropriate,' he wrote. It comes as construction of new homes has slowed and sellers are being forced to reduce their prices or pull their homes off the market entirely. 'Home sales are already uber depressed,' Zandi wrote, adding that the housing market could become an issue for the wider economy. 'Housing will thus soon be a full-blown headwind to broader economic growth, adding to the growing list of reasons to be worried about the economy's prospects later this year and early next,' he wrote.
Daily Mail
a day ago
- Business
- Daily Mail
Very telling sign that the US is on course for recession
More than half of US industries are already cutting jobs — a glaring red flag that a recession is near, a leading economist has warned. Moody's Analytics chief economist Mark Zandi said that, although the country hasn't officially entered a downturn, cracks are widening in the jobs market. He said on X that 'far and away' the most important recession indicator is 'payroll employment.' 'If employment declines for more than a month consecutively, we are in a downturn,' he wrote. Though payrolls haven't fallen yet this time, growth has stalled since May — and recent data revisions suggest employment could already be shrinking. The most recent federal jobs reports showed hiring for for May and June was much lower than initially thought. On the basis, the report for July is expected to show a decline. 'It wouldn't be surprising if we learn with the coming revisions that employment is already declining,' he explained. Zandi's warning comes a week after a report showed layoffs have risen 140 percent from a year ago. Zandi said that historically, it's not clear exactly when a recession starts until well after the fact. However, he added that 'in the past, if more than half the ≈400 industries in the payroll survey were shedding jobs, we were in a recession. In July, over 53% of industries were cutting jobs, and only healthcare was adding meaningfully to payrolls.' Zandi also issued a terrifying 'red flare' warning to homeowners last month. A 'red flare' warning suggests the market is experiencing major instability and a fall is imminent. 'I sent off a yellow flare on the housing market in a post a couple of weeks ago, but I now think a red flare is more appropriate,' he wrote. It comes as construction of new homes has slowed and sellers are being forced to reduce their prices or pull their homes off the market entirely. 'Home sales are already uber depressed,' Zandi wrote, adding that the housing market could become an issue for the wider economy. 'Housing will thus soon be a full-blown headwind to broader economic growth, adding to the growing list of reasons to be worried about the economy's prospects later this year and early next,' he wrote. Companies have already announced more than 800,000 job cuts this year alone If the housing markets woes do tip into the wider economy it could increase the likelihood of a recession, Zandi warned. On Sunday Zandi offered a ray of hope in the otherwise gloomy outlook, writing that 'things could still turn around if the economic policies weighing on the economy soon lift. 'But that looks increasingly unlikely,' he added. In June the Organization for Economic Co-operation and Development (OECD) warned that the US would tip into recession as a result of Trump's aggressive trade policies. The OECD also criticized other key Trump policies including his vast reductions in the federal workforce and curbs on immigration, both of which are also dragging on the economy. The report also warned that the US budget deficit will expand further as weaker economic activity will override the gains made by spending cuts and revenue from tariffs.
Yahoo
2 days ago
- Business
- Yahoo
More than half of industries are already shedding workers, a ‘telling' sign that's accompanied past recessions, top economist says
Moody's Analytics chief economist Mark Zandi followed up his earlier warning that the economy is on the brink of a recession. On Sunday, he pointed out that the start of a recession is often not clear until after the fact. For now, the jobs data don't signal a recession yet, but more than half of U.S. industries are already shedding workers. The U.S. economy isn't in a recession yet, but the number of industries cutting back on headcount is concerning, and future revisions to jobs data could show employment is already falling, according to Moody's Analytics chief economist Mark Zandi. In a series of X posts on Sunday, he followed up his warning from last weekend that the economy is on the brink of a recession. This time, Zandi pointed out that the start of a recession is often unclear until after the fact, noting that the National Bureau of Economic Research is the official arbiter of when one begins and ends. According to the NBER, a recession involves 'a significant decline in economic activity that is spread across the economy and lasts more than a few months.' It also looks at a range of indicators, including personal income, employment, consumer spending, sales, and industrial production. Zandi said payroll employment data is by far the most important data point, and declines for more than a month consecutively would signal a downturn. While employment hasn't started falling yet, it's barely grown since May, he added. Payrolls expanded by just 73,000 last month, well below forecasts for about 100,000. Meanwhile, May's tally was revised down from 144,000 to 19,000, and June's total was slashed from 147,000 to just 14,000, meaning the average gain over the past three months is now only 35,000. Because recent revisions have been consistently much lower, Zandi said he wouldn't be surprised if subsequent revisions show that employment is already declining. 'Also telling is that employment is declining in many industries. In the past, if more than half the ≈400 industries in the payroll survey were shedding jobs, we were in a recession,' he added. 'In July, over 53% of industries were cutting jobs, and only healthcare was adding meaningfully to payrolls.' Last week, Zandi said data often sees big revisions when the economy is at an inflection point, like a recession. And on Wednesday, Federal Reserve Governor Lisa Cook similarly noted that large revisions are 'typical of turning points' in the economy. For now, the Atlanta Fed's GDP tracker points to continued growth, and the third-quarter forecast even edged up to 2.5% from 2.1% last week, though that's still a slowdown from 3% in the second quarter. There are also no signs of mass layoffs as weekly jobless claims haven't spiked, and the unemployment rate has barely changed, bouncing in a tight range between 4% and 4.2% for more than a year. But Zandi said the jobless rate will be a 'particularly poor barometer of recession' as the recent decrease in the number of foreign-born workers has kept the labor force flat. 'Also note that a recession is defined by a persistent decline in jobs — the decline lasts for at least a few months. We aren't there yet, and we are thus not in recession,' he explained. 'Things could still turn around if the economic policies weighing on the economy soon lift. But that looks increasingly unlikely.' Wall Street is divided on what the jobs data are saying, with some analysts attributing the slowdown to weak labor demand while others blame weak labor supply amid President Donald Trump's immigration crackdown. Bank of America falls into the supply camp and said 'markets are conflating recession with stagflation.' But UBS warned of weak demand, pointing out the average workweek is below 2019 levels, and said the labor market is showing signs of 'stall speed.' Last week, economists at JPMorgan also sounded the alarm on a potential downturn. They noted that jobs data show hiring in the private sector has cooled to an average of just 52,000 in the last three months, with sectors outside health and education stalling. Coupled with the lack of any signs that unwanted separations are surging due to immigration policy, this is a strong signal that business demand for labor has cooled, they said. 'We have consistently emphasized that a slide in labor demand of this magnitude is a recession warning signal,' JPMorgan added. 'Firms normally maintain hiring gains through growth downshifts they perceive as transitory. In episodes when labor demand slides with a growth downshift, it is often a precursor to retrenchment.' This story was originally featured on Erreur lors de la récupération des données Connectez-vous pour accéder à votre portefeuille Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données
Yahoo
2 days ago
- Business
- Yahoo
More than half of industries are already shedding workers, a ‘telling' sign that's accompanied past recessions, top economist says
Moody's Analytics chief economist Mark Zandi followed up his earlier warning that the economy is on the brink of a recession. On Sunday, he pointed out that the start of a recession is often not clear until after the fact. For now, the jobs data don't signal a recession yet, but more than half of U.S. industries are already shedding workers. The U.S. economy isn't in a recession yet, but the number of industries cutting back on headcount is concerning, and future revisions to jobs data could show employment is already falling, according to Moody's Analytics chief economist Mark Zandi. In a series of X posts on Sunday, he followed up his warning from last weekend that the economy is on the brink of a recession. This time, Zandi pointed out that the start of a recession is often unclear until after the fact, noting that the National Bureau of Economic Research is the official arbiter of when one begins and ends. According to the NBER, a recession involves 'a significant decline in economic activity that is spread across the economy and lasts more than a few months.' It also looks at a range of indicators, including personal income, employment, consumer spending, sales, and industrial production. Zandi said payroll employment data is by far the most important data point, and declines for more than a month consecutively would signal a downturn. While employment hasn't started falling yet, it's barely grown since May, he added. Payrolls expanded by just 73,000 last month, well below forecasts for about 100,000. Meanwhile, May's tally was revised down from 144,000 to 19,000, and June's total was slashed from 147,000 to just 14,000, meaning the average gain over the past three months is now only 35,000. Because recent revisions have been consistently much lower, Zandi said he wouldn't be surprised if subsequent revisions show that employment is already declining. 'Also telling is that employment is declining in many industries. In the past, if more than half the ≈400 industries in the payroll survey were shedding jobs, we were in a recession,' he added. 'In July, over 53% of industries were cutting jobs, and only healthcare was adding meaningfully to payrolls.' Last week, Zandi said data often sees big revisions when the economy is at an inflection point, like a recession. And on Wednesday, Federal Reserve Governor Lisa Cook similarly noted that large revisions are 'typical of turning points' in the economy. For now, the Atlanta Fed's GDP tracker points to continued growth, and the third-quarter forecast even edged up to 2.5% from 2.1% last week, though that's still a slowdown from 3% in the second quarter. There are also no signs of mass layoffs as weekly jobless claims haven't spiked, and the unemployment rate has barely changed, bouncing in a tight range between 4% and 4.2% for more than a year. But Zandi said the jobless rate will be a 'particularly poor barometer of recession' as the recent decrease in the number of foreign-born workers has kept the labor force flat. 'Also note that a recession is defined by a persistent decline in jobs — the decline lasts for at least a few months. We aren't there yet, and we are thus not in recession,' he explained. 'Things could still turn around if the economic policies weighing on the economy soon lift. But that looks increasingly unlikely.' Wall Street is divided on what the jobs data are saying, with some analysts attributing the slowdown to weak labor demand while others blame weak labor supply amid President Donald Trump's immigration crackdown. Bank of America falls into the supply camp and said 'markets are conflating recession with stagflation.' But UBS warned of weak demand, pointing out the average workweek is below 2019 levels, and said the labor market is showing signs of 'stall speed.' Last week, economists at JPMorgan also sounded the alarm on a potential downturn. They noted that jobs data show hiring in the private sector has cooled to an average of just 52,000 in the last three months, with sectors outside health and education stalling. Coupled with the lack of any signs that unwanted separations are surging due to immigration policy, this is a strong signal that business demand for labor has cooled, they said. 'We have consistently emphasized that a slide in labor demand of this magnitude is a recession warning signal,' JPMorgan added. 'Firms normally maintain hiring gains through growth downshifts they perceive as transitory. In episodes when labor demand slides with a growth downshift, it is often a precursor to retrenchment.' This story was originally featured on 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
Yahoo
2 days ago
- Business
- Yahoo
More than half of industries are already shedding workers, a ‘telling' sign that's accompanied past recessions, top economist says
Moody's Analytics chief economist Mark Zandi followed up his earlier warning that the economy is on the brink of a recession. On Sunday, he pointed out that the start of a recession is often not clear until after the fact. For now, the jobs data don't signal a recession yet, but more than half of U.S. industries are already shedding workers. The U.S. economy isn't in a recession yet, but the number of industries cutting back on headcount is concerning, and future revisions to jobs data could show employment is already falling, according to Moody's Analytics chief economist Mark Zandi. In a series of X posts on Sunday, he followed up his warning from last weekend that the economy is on the brink of a recession. This time, Zandi pointed out that the start of a recession is often unclear until after the fact, noting that the National Bureau of Economic Research is the official arbiter of when one begins and ends. According to the NBER, a recession involves 'a significant decline in economic activity that is spread across the economy and lasts more than a few months.' It also looks at a range of indicators, including personal income, employment, consumer spending, sales, and industrial production. Zandi said payroll employment data is by far the most important data point, and declines for more than a month consecutively would signal a downturn. While employment hasn't started falling yet, it's barely grown since May, he added. Payrolls expanded by just 73,000 last month, well below forecasts for about 100,000. Meanwhile, May's tally was revised down from 144,000 to 19,000, and June's total was slashed from 147,000 to just 14,000, meaning the average gain over the past three months is now only 35,000. Because recent revisions have been consistently much lower, Zandi said he wouldn't be surprised if subsequent revisions show that employment is already declining. 'Also telling is that employment is declining in many industries. In the past, if more than half the ≈400 industries in the payroll survey were shedding jobs, we were in a recession,' he added. 'In July, over 53% of industries were cutting jobs, and only healthcare was adding meaningfully to payrolls.' Last week, Zandi said data often sees big revisions when the economy is at an inflection point, like a recession. And on Wednesday, Federal Reserve Governor Lisa Cook similarly noted that large revisions are 'typical of turning points' in the economy. For now, the Atlanta Fed's GDP tracker points to continued growth, and the third-quarter forecast even edged up to 2.5% from 2.1% last week, though that's still a slowdown from 3% in the second quarter. There are also no signs of mass layoffs as weekly jobless claims haven't spiked, and the unemployment rate has barely changed, bouncing in a tight range between 4% and 4.2% for more than a year. But Zandi said the jobless rate will be a 'particularly poor barometer of recession' as the recent decrease in the number of foreign-born workers has kept the labor force flat. 'Also note that a recession is defined by a persistent decline in jobs — the decline lasts for at least a few months. We aren't there yet, and we are thus not in recession,' he explained. 'Things could still turn around if the economic policies weighing on the economy soon lift. But that looks increasingly unlikely.' Wall Street is divided on what the jobs data are saying, with some analysts attributing the slowdown to weak labor demand while others blame weak labor supply amid President Donald Trump's immigration crackdown. Bank of America falls into the supply camp and said 'markets are conflating recession with stagflation.' But UBS warned of weak demand, pointing out the average workweek is below 2019 levels, and said the labor market is showing signs of 'stall speed.' Last week, economists at JPMorgan also sounded the alarm on a potential downturn. They noted that jobs data show hiring in the private sector has cooled to an average of just 52,000 in the last three months, with sectors outside health and education stalling. Coupled with the lack of any signs that unwanted separations are surging due to immigration policy, this is a strong signal that business demand for labor has cooled, they said. 'We have consistently emphasized that a slide in labor demand of this magnitude is a recession warning signal,' JPMorgan added. 'Firms normally maintain hiring gains through growth downshifts they perceive as transitory. In episodes when labor demand slides with a growth downshift, it is often a precursor to retrenchment.' This story was originally featured on
