403
Sorry!!
Error! We're sorry, but the page you were looking for doesn't exist.
Moody’s warns that US ‘on precipice’ of recession
(MENAFN) The United States is teetering on the edge of a recession due to President Donald Trump’s trade and immigration policies, according to Moody’s chief economist Mark Zandi. In a statement posted on X (formerly Twitter), Zandi said recent economic data shows clear signs of a slowdown, warning that the US economy is “on the precipice” of a downturn.
His comments followed a Bureau of Labor Statistics report showing that job growth has dramatically slowed, with an average of just 35,000 jobs added per month from May to July—less than a third of the previous year’s pace and the weakest since 2020. Other troubling signs include near-stagnant consumer spending, rising inflation (2.7% year-on-year in June), and shrinking factory output for the fourth consecutive month.
“The message is clear: consumer activity has stalled, both construction and manufacturing sectors are shrinking, and job losses are likely ahead,” Zandi warned. He noted that persistently high inflation limits the Federal Reserve’s ability to stimulate the economy, especially under Trump’s current policies.
Zandi criticized Trump’s increasing tariffs and tighter immigration rules as key factors dragging down growth. He argued that the tariffs are eroding corporate profits and household spending power, while reduced immigration is shrinking the labor force and limiting the economy’s capacity.
Since taking office again, Trump has introduced plans to deport four million undocumented immigrants over four years and imposed widespread tariffs. He defends these measures as necessary to protect American jobs, reduce trade deficits, and boost domestic manufacturing.
However, Zandi is not alone in raising alarms. Federal Reserve Chair Jerome Powell has also warned that tariffs could drive up inflation and unemployment. A study by the Economic Policy Institute estimated that mass deportations could cost the US nearly 6 million jobs. Additionally, researchers at the University of Pennsylvania’s Wharton School predicted the deportations would reduce wages, shrink GDP, and further increase the federal budget deficit.
His comments followed a Bureau of Labor Statistics report showing that job growth has dramatically slowed, with an average of just 35,000 jobs added per month from May to July—less than a third of the previous year’s pace and the weakest since 2020. Other troubling signs include near-stagnant consumer spending, rising inflation (2.7% year-on-year in June), and shrinking factory output for the fourth consecutive month.
“The message is clear: consumer activity has stalled, both construction and manufacturing sectors are shrinking, and job losses are likely ahead,” Zandi warned. He noted that persistently high inflation limits the Federal Reserve’s ability to stimulate the economy, especially under Trump’s current policies.
Zandi criticized Trump’s increasing tariffs and tighter immigration rules as key factors dragging down growth. He argued that the tariffs are eroding corporate profits and household spending power, while reduced immigration is shrinking the labor force and limiting the economy’s capacity.
Since taking office again, Trump has introduced plans to deport four million undocumented immigrants over four years and imposed widespread tariffs. He defends these measures as necessary to protect American jobs, reduce trade deficits, and boost domestic manufacturing.
However, Zandi is not alone in raising alarms. Federal Reserve Chair Jerome Powell has also warned that tariffs could drive up inflation and unemployment. A study by the Economic Policy Institute estimated that mass deportations could cost the US nearly 6 million jobs. Additionally, researchers at the University of Pennsylvania’s Wharton School predicted the deportations would reduce wages, shrink GDP, and further increase the federal budget deficit.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept
any responsibility or liability for the accuracy, content, images,
videos, licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright
issues related to this article, kindly contact the provider above.
Most popular stories
Market Research
More Story
Comments
No comment