- Zandi added that while the recent surge in gasoline prices may not impact high-income households that much, the low-income ones will have tough choices to make.
- The economist stated in a recent note that oil prices are an important variable in the firm’s leading economic indicator model.
- WTI crude futures expiring in May have gained around 38% since the Iran war began in late February, while Brent crude futures expiring in June have soared about 37%.
Moody’s Analytics’ chief economist, Mark Zandi, reportedly said Tuesday that a recession in the U.S. is “more than likely” by the second half of this year.
During an interview with CNBC, Zandi stated that recession risks were on the rise in the U.S. even before the Iran war began in February.
“As you know, the job market has gone flat here, we lost jobs in February. We’ve not been going anywhere fast for the past year. Unemployment’s drifting higher and that’s despite a decline in participation,” Zandi said.
According to data from ADP, private employers in the U.S. added an average of 10,000 jobs per week during the four weeks ending March 7, 2026.
Tough Choices To Make For Low-Income Households, Says Zandi
Zandi added that while the recent surge in gasoline prices may not impact high-income households that much, the low-income ones will have tough choices to make.
“Retail sales have gone kind of sideways here in the last year, vehicle sales are down, home sales are very weak… they’re down.. I don’t know that the consumer is really doing that well,” he added in the interview.
Boiling Crude Fuels Recession Concerns
WTI crude futures expiring in May have gained around 38% since the Iran war began in late February, while Brent crude futures expiring in June have soared about 37%. At the time of writing, WTI crude futures were hovering over $93 a barrel following a 6% rise, while Brent crude futures were up 5% to hover around $101 a barrel.
Zandi stated in a recent note that oil prices are an important variable in the firm’s leading economic indicator model.
“Every recession since WWII, save the pandemic recession, has been preceded by a spike in oil prices. Higher oil prices don’t do the same economic damage as in years past, as we produce as much as we consume, but consumers still get hit hard and fast,” he said.
The United States Oil Fund ETF (USO) gained more than 4%, while the ProShares Ultra Bloomberg Crude Oil ETF (UCO) was up about 7% at the time of writing.
“If oil prices remain elevated for much longer (weeks and not months), a recession will be difficult to avoid,” Zandi added.
At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.28%; the Invesco QQQ Trust ETF (QQQ) fell 0.69%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.09%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘extremely bearish’ territory.
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