Moody’s Economist Warns One-Third U.S. Nears Recession

Mark Zandi, chief economist at Moody's Analytics, warns that the U.S. economy is on the brink of a recession, with nearly a third of states contributing to the GDP either in or at high risk of entering a recession. He highlights that southern states generally show the strongest growth, though it is slowing, while the northeast and much of the Midwest face economic difficulties. Key economic indicators such as stalled job growth and rising prices signal significant risks, with Zandi predicting inflation could rise to nearly 4% by late 2026. Government job cuts, especially in Washington, D.C., exacerbate regional recessions, and ongoing tariffs and restrictive immigration policies are identified as damaging factors. Despite these challenges, Zandi notes that California and New York remain stable and are crucial to avoiding a national downturn, alongside growth sectors like artificial intelligence. While Americans express increasing economic pessimism, Zandi emphasizes that the economy is not currently in recession, but warns that layoffs could soon trigger alarm bells.