Economist warns US growth hides recession risks despite strong GDP
Mark Zandi, chief economist at Moody’s Analytics, has raised concerns about the stability of the US economy. Despite recent strong GDP figures, he warns that underlying weaknesses—particularly in the labor market—could signal trouble ahead.
Zandi highlights a mismatch between headline economic growth and ground-level conditions. While GDP growth appears solid, hiring has slowed to levels typically seen before recessions. He also notes that a 2% real GDP growth rate in the fourth quarter won’t be enough to absorb new workers entering the job market.
The economist cautions against relying on stock market performance as a measure of economic health. A potential burst in the AI-driven market bubble, he argues, could trigger wider financial instability. His 2026 outlook suggests that prolonged weak growth may erode consumer and business confidence, leading to reduced spending and investment. Policy decisions under the Trump administration will play a key role in shaping the economy’s path. Trade tariffs and immigration policies, in particular, could either ease or worsen existing vulnerabilities. Zandi stresses that even decent GDP growth may not mask deeper economic flaws for much longer.
Zandi’s warnings point to a fragile economic outlook. Weak hiring, potential market volatility, and policy uncertainties all raise the risk of a downturn. Without stronger growth or targeted interventions, the US economy could face a recession in the near term.
