Economist Who Predicted 2008 Financial Crisis Flags ‘Most Disconcerting’ Jobs Data Signal Hinting At US Recession

Zandi said only healthcare and hospitality were adding to payrolls, while the goods side of the economy lost jobs.
Mark Zandi, chief economist of Moody's Analytics, testifies during the Senate Budget Committee hearing titled "The Default on America Act” on Thursday, May 4, 2023.
Mark Zandi, chief economist of Moody's Analytics, testifies during the Senate Budget Committee hearing titled "The Default on America Act” on Thursday, May 4, 2023. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
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Shanthi M·Stocktwits
Published Sep 07, 2025 | 11:34 PM GMT-04
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The August non-farm payrolls report, released Friday, showing anemic job growth, has prompted an economist to flag U.S. recession worries. Moody’s Analytics Chief Economist Mark Zandi on Sunday pointed to a data point from this year’s monthly jobs reports, which is associated with a recession. 

Zandi was among the first economists to predict the Great Financial Crisis of 2008, which originated in the U.S. housing market and led to a recession that lasted for 18 months.

In an X post on Sunday, Zandi said, “What’s perhaps most disconcerting about the flagging job market is how dependent it is on healthcare and hospitality for what little job growth is occurring.”

“Since the beginning of the year, the economy has created a paltry 600k jobs, but without the job growth in these industries, there would be zero job growth. Indeed, fewer than half of the industries in the Bureau of Labor Statistics’ payroll employment survey have added to payrolls over the past 6 months.” 

Zandi said, “This only happens when the economy is in recession.”

The stock market, however, does not reflect concerns about recession. The S&P 500 Index, a measure of broader U.S. market performance, trades just shy of its record high. The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) have gained 11.10% and 12.98%, respectively, for the year.

The negativity is weighted more toward tech stocks. Retailers’ sentiment toward the SPY ETF stayed ‘bullish’ (66/100) on Stocktwits, while that toward the QQQ was ‘extremely bearish’ (16/100). The message volume on both streams remained at ‘high’ levels.

Sunday’s comments followed remarks from  Zandi on Friday, just after the release of jobs data, which showed that U.S. employers added 22,000 jobs in August, much less than the 75,000 job growth expected by economists. The marked slowdown in job growth was accompanied by a rise in the jobless rate to its highest level since October 2021.

The economist said the U.S. was in a “jobs recession,” adding that payroll employment “declined in June, and while it was up in July and August, the increases were on the margin and seem likely to be revised away.”

While noting that the goods side of the economy, including manufacturing, mining and construction, and the federal government lost jobs, Zandi said only healthcare and hospitality were adding to payrolls.

“It’s not a full-blown recession, as GDP, incomes, and profits are still slowly growing. But for how much longer, if the economy continues losing jobs?”

Following the jobs report, the odds of a 50 basis point cut at the September Federal Open Market Committee (FOMC) meeting rose to 10% from 0% ahead of the meeting, according to the CME FedWatch Tool. Futures traders have now baked in a 90% probability of a 25bps cut.

Not all are convinced that the economy is on the brink of a recession, apparently due to expectations that the central bank and the government will step in to cushion any slide. On betting site Kalshi, the odds of a recession are only 6%. Polymarket has put it at a slightly higher 8%.

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