Economist Mark Zandi thinks the US economy is on the brink of a recession, and there are a few signs he says that will show one has arrived.
He delivered his dire warning about the state of the economy last week, and followed it up over the weekend with a series of posts on X about what he's eyeing to know if the economy has tipped into a downturn.
The topic of recession is heavily debated, with economists consistently deliberating over what qualifies. While the US is not yet in a technical recession—defined as two straight quarters of negative growth—other areas like the labor market have been sounding a warning.
Zandi noted in his post that historically, the answer to exactly what signifies a recession is not always clear until after circumstances have shifted. However, in the thread, he laid out a few key factors:
- Payroll employment
- Employment levels
- Job decline consistency
He said that the National Bureau of Economic Research (NBER) is considered the arbiter of when a recession begins and ends, noting one key factor that its academic researchers consider above others.
"While they look at a plethora of data to make this determination, most importantly, far and away, is payroll employment," he stated, adding that if employment falls for more than a month consecutively, the economy has entered a downturn.
Zandi said that payroll employment has not fallen yet but added that it has barely increased since May, which he seems to find troubling.
"Given that the recent revisions to the jobs numbers have been consistently lower, much lower, it wouldn't be surprising if we learn with the coming revisions that employment is already declining," he said.
For the second factor, Zandi pointed out that employment is falling throughout many industries. He said that previously, if half of the 400 industries being surveyed reported declining employment, an economic recession had begun.
He cited recent data that revealed that in July 2025, more than 53% of industries reported job cuts, with only the healthcare sector showing employment growth.
"But, unemployment is a lagging indicator and given that the labor force has gone sideways this year as the number of foreign-born workers is declining, unemployment will be a particularly poor barometer of recession," he added.
Zandi concluded that the US economy is still not in a recession, as evidenced by the job decline factor. "A recession is defined by a persistent decline in jobs — the decline lasts for at least a few months," he said. "We aren't there yet."
He said that the economic tides could shift if policy weighs on growth. In his previous post, Zandi said that Trump's policies, mainly tariffs and immigration, are the big drivers of his view that the economy is teetering at the edge of a downturn.
