Top economist Mark Zandi has a new recession warning
If the pace of layoffs accelerates, "it would certainly be a jobs recession," Zandi said in a new interview
Mark Zandi, chief economist at Moodys Analytics, in Washington, DC, US, in May 2023. (Al Drago/Bloomberg via Getty Images)
Prominent economist Mark Zandi is newly worried about the weakening labor market and the potential for a recession.
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In an interview with Fortune published Wednesday, Zandi said many Americans already reside "on the financial edge."
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If the pace of layoffs accelerates, he said, then "it would certainly be a jobs recession."
Unemployment has ticked up since the start of the year. It reached 4.4% in September from 4.0% in January, per the latest data available. It's a four-year peak that suggests more Americans are applying for jobs and not landing one. For younger workers between 20 and 24 years of age, that rate is more than double at 9.2%.
Zandi pointed to a slowdown in the job market that began soon after President Donald Trump unveiled his double-digit global tariffs in April. "If you look at when job growth really came to a standstill, it is back soon after Liberation Day," he said.
The latest JOLTS survey tracking turnover in the labor market released Tuesday showed layoffs creeping up to 1.2% in October, compared to 1.1% in September. Meanwhile, the hiring rate remained level at 3.2% with no change from the previous month.
It's indicative of what economists and analysts have labeled a "low hire, low fire" job market.
Yet one bright spot in the U.S. economy was the release of a separate survey from the National Federation of Independent Businesses showing small business optimism ticking up in November. More employers signaled plans to hire workers at the start of next year.