By Hugh Cameron | NEWSWEEK
U.S. News Reporter

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.

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https://www.newsweek.com/us-economy-recession-precipice-economist-warning-2109011