The report on shocking jobs was not the only red flag on Friday. The indicators of the past week take a whole picture of an economy heading to a decline, according to Moody’s chief economist, Mark Zandi.
After months of viewing extremely elastic in terms of President Donald Trump’s tariffs, the economic look suddenly turned into a gloomy.
“The economy is at the ruin of the recession. That’s a clear takeover from the economic data landfill last week,” Zandi wrote in A. series of posts on x on Sunday. “Consumer consumption is equal, construction and production are contracted, and employment is intended to fall. And with inflation on the rise, it is difficult for the Fed to come to the rescue.”
Salaries rose by only 73,000 last monthfar below the predictions of about 100,000. Meanwhile, May -Tal was revised from 144,000 to 19,000, and the total June was reduced from 147,000 to only 14,000, which means that the average profit over the past three months is now only 35,000.
While Trump claimed without evidence that jobs were “rigged” and fired by the head of the report, Zandi noted that the data often received major audits when the economy was at the point of penetration, as a recession.
Separate reports also had warning signs. GDP withdrew firmly than expected in the second quarter, but metrics that take away the influence of foreign trade and instead of the ultimate domestic demand indicates a slowdown.
The report on personal consumption expenditure showed that the underlying inflation was accelerated to 2.8%, further above the Fed goal 2% and that consumer consumption increased less than expected in June. Fed policy makers focused on lowering interest rates because they are waiting to see how much tariffs affect inflation.
Meanwhile, construction costs continued to decline in June amidst a sharp decline in a family’s homes. The Institute for Production of Activities at the July Supply Management Institute is dipped, indicating that the sector is being concluded at a faster pace.
For now, GDP -Tracker of Atlanta Fed Points for continuous growth, although expected to decrease to 2.1% in the third quarter of 3% in the second quarter.
There are also no signs of mass firing, and the unemployment rate has barely changed, jumping into a narrow range between 4% and 4.2% more than a year.
But Zandi said the unemployment rate is still low just because the size of the workforce is stagnated. That’s as a workforce born abroad fell 1.2 million in the last six months amid Trump’s immigration, while the overall labor rate has declined.
Because the labor supply softened and demand. Zandi pointed to “freezing the economy, especially for recent graduates”. The result is that the so-called neutral level of profit from work needed to absorb new workers-and keep the unemployment rate stable-now is much lower.
“It’s not a mystery why the economy is fighting; the blame is increasing US tariffs and a highly restrictive immigration policy,” Zandi added. “Tariffs are more deep in the profits of US companies and the purchasing power of US households. Less immigrant workers means a smaller economy.”
On Friday, JPMorgan’s economists also sounded alarm to a potential decline. They have noted that job data show that private sector employment has cooled off an average of 52,000 in the last three months, with sectors out of health and education.
Combined with a lack of any signs that unwanted separations are increasing as a result of immigration policy, this is a strong signal that business demand for labor has cooled down, they explained.
“We have repeatedly emphasized that the slide in labor demand of this size is a recession warning signal,” Jpmorgan added. “Companies usually maintain employment gains by lowering the growth they consider transitional. In episodes when labor demand slips by lowering growth, it is often the forerunner of withdrawal.”
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