The U.S. economy may be closer to recession than the Trump administration acknowledges, with housing and construction poised to feel the pinch first, according to Mark Zandi, chief economist at Аналитика Муди.
In an interview with Newsweek, Zandi said his biggest fear, one he has warned about for months, is now materializing — a cascade of weakening job growth, rising inflation and a softening housing market that could tip the country into a downturn by late 2025.
“I don’t think the economy is in a recession, at least not at this point,” Zandi told the outlet. “But it feels like it’s on the brink, it’s on the precipice of this recession.”
Zandi was among the first economists to warn of an impending financial crisis before the 2008 housing market crash.
In a 2006 Moody’s report titled “Housing at the Tipping Point”, he cautioned that a housing downturn might escalate into a more severe collapse.
He also stressed that broader economic consequences — such as weakening employment, reduced consumer spending and increased financial strain — could amplify a downturn.
Jobs flashing red
Zandi pointed to employment as the most pressing warning sign — with job growth slowed to a “virtual standstill.”
He said that most new positions are concentrated in the health care, education and government sectors.
“That’s the firewall between recession and no recession, is the low layoffs,” Zandi said. “So we’re not in recession, but I’d say the indicator that’s flashing reddest is jobs.”
Once monthly payroll employment turns negative, “alarm bells should start going off,” he added, saying this could happen soon.
Tariffs and rising prices
The Trump administration has touted strong gross domestic product growth, foreign investment and controlled inflation as proof that тарифы have strengthened the economy.
But Zandi believes these same policies are creating cracks.
“Prices are already rising, you can see it in the data, but it’s going to rise to a degree that it will be impossible for people to ignore,” he told Newsweek. “They’ll see it clearly in the things that they’re buying on an everyday basis.”
Zandi did not mince words on what he sees as the underlying cause of the slowdown.
“It’s the tariffs and it’s the restrictive immigration policy. Those two things are doing real damage to the economy,” he said.
The Национальная ассоциация строителей жилья and other organizations requested a освобождение от таможенных пошлин for building materials earlier this year.
It’s also possible that some of these measures could be included in new Trump administration plans in the coming weeks that aim to address housing costs.
Housing weakness emerging
Zandi described housing as “very troubled” and warned that a construction slowdown could deepen recession risks.
“Single-family homebuilding has held up well as builders have been able to use interest rate buy-downs and other incentives to maintain sales,” he said. “But that’s no longer working.
“The inventories of unsold homes are now as high as they’ve been since prior to the (global financial crisis) and that housing bust.”
Despite his stark warnings, Zandi stressed that the U.S. economy retains long-term strengths, particularly in technology.
“There’s a lot also structurally that’s right about the U.S. economy,” he said, citing the boom in искусственный интеллект as having “real and significant, very positive economic consequences.”
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