Moody’s Analytics’ chief economist Mark Zandi cautions that a recession may be on the horizon.
In an interview with CNBC’s Andrea Miller, Zandi said a recession did not occur in the first half of this year. Zandi called employment levels the “most important indicator[s]” of a recession. With unemployment at the low rate of 3.5%, he doesn’t buy the view that two back-to-back quarters of negative growth alone are sufficient to make for a recession.
But Zandi did warn that he expects layoffs to increase in the days ahead.
“With this kind of low unemployment, inflation’s going to remain a problem,” he said, and to address that the Federal Reserve has signaled it will continue to raise interest rates in an attempt to slow down the job market.
Zandi attributed the confusion about whether the U.S. experienced a recession in the first half of this year to the coronavirus pandemic and the Russian invasion of Ukraine. “These two massive supply shocks have hit the economy at roughly the same time,” Zandi said, which makes interpreting the data about the economy particularly challenging.
The Moody’s chief economist said that if rising prices don’t ebb “the only way to get rid of that persistent stubborn inflation would be to push the economy into a recession.” If there is a recession, Zandi said it “probably won’t happen until the second half of 2023.”
As to preparing for a downturn, Zandi said Americans should “spend, save, invest in the same way that they typically do,” but to remain cautious.
“Americans don’t need to run for the bunkers,” he said. “But maybe keep one hand on the bunker door just to be safe and sound.”
Watch the full interview in the video above.
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What Broke U.S. Recession Indicators | Mark Zandi…(read more)
BREAKING: Recession News
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Mark Zandi, the chief economist of Moody’s Analytics, recently stated that the typical indicators that signal an upcoming recession in the United States have broken down. The traditional indicators that have been reliable for forecasting recessions in the past are no longer working as they have in the past. This shift in the economic indicators has many experts asking why.
One explanation for the sudden shift in the recession indicators could be the lingering impact of the financial crisis of 2008. This financial crisis sparked a transformation in the global financial system, resulting in new regulations and financial management strategies. This shift in the financial landscape could have contributed to the alterations in the traditional recession indicators.
Another possible explanation is the concept of the “new normal” economy. After the financial crisis, the economy did not rebound in the same way as it has following previous economic downturns. Instead, the economy has experienced a slower, more steady recovery with lower growth rates. With this new normal in place, it is possible that the traditional recession indicators simply no longer apply.
There may also be demographic factors at play. For example, the aging workforce in the United States has resulted in a decrease in the number of people looking for work. This means that fewer people are actively seeking employment, which influences the overall state of the economy. Additionally, the gig economy – where individuals work part-time or freelance jobs instead of full-time positions – has changed the way Americans work and earn money. This shift has made it more challenging to predict how the economy will react to changes and what traditional measures are no longer relevant.
Whatever the cause, the fact remains that the recession indicators that were once reliable for forecasting a U.S. economic downturn no longer work in their traditional form. Economists like Zandi are now on the lookout for new indicators that will signal economic trouble. The shift in the economic indicators may be a surprise, but it is yet another indication that the financial market is a constantly evolving entity that requires continued attention and adaptation.
This guy thinks we should never pay off the debt and just keep borrowing borrowing with a strong economy, that's the problem with the world is everybody is in debt
nobody pays for anything with their own money
This recession is most likely the result of an external factor. For the first time in decades, the United States is losing its clout as a federal reserve currency. They don't have any more economies to use to control inflation, and less money is being spent on stock and oil trading than in the past. They all lend support to the idea that a new multilateral world order is in the works.
Congress needs to impose excised taxes on high profits of all corporations, Its the only way to slow inflation. Hurting people with increasing interest will not slow the inflation. HIGH INFLATION IS CAUSED BY OVER PRICING OF GOODS BY CORPORATIONS.
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly—which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stock portfolio
During Trump's tenure, the US economy contracted 3.5% – the fastest rate since 1946. GDP growth was the worst since the Great Depression. Trump was the worst jobs president in recorded history. The Dow had the largest single-day stock market drops in the history of Dow Jones. The national debt under Trump increased by 39 percent. The annual deficit under Trump ranks as the second highest of any president in history.
Gas prices were high BEFORE Ukraine.
Jerome Powell and the Fed literally trying to put people out on the streets.
THIS GIRL LOOKS WEIRD & IS HORRIBLY DISTRACTING. GET A MAN, NOT A WOKE SJW HAG!!!
If you dont see that the usa economy has completely failed you shouldnt be any kind of financial analysis. I definitely dont need a rich guy in a suit giving me economic advice cause they are consistently wrong especially republicans. They are the dumbest people among us.
2:57 False. Wages growth is significantly less than inflation aka not the problem.
Funny how they are always trying to gaslight you that your wages should be less. We can have this conversation again when C-Suite compensation is slashed, profit margins are razor thin, and no stock buybacks are occuring
I have been a fan of Mark Zandi for 20 years. He has a straight forward way of communicating economic information to us common folk.
‘’Courage taught me no matter how bad a crisis gets … any sound investment will eventually pay off."
With all due respect this man is full of s -it .two down quarters has been defined as a recession since the 1950’s . Jobs are a lagging indicator . A teenager knows this .
With the media, its usually sad news. Nonetheless, this administration has strung us all up. Ab Initio, dividends are what got me into investing in the stock market. The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. Have over $730K in my portfolio as I bought a lot of dividend stocks before, I'm buying more now, and I will buy more when it drops furthe
Unfortunately what the labor numbers do not take into account are people having to go back to work or get second jobs due to inflation.
Would a single mom needing two jobs indicate a “strong economy” Or elderly who have their retirements getting eroded by inflation and having to re enter the job market.
Also doesn’t take into account individuals who gave up finding a job and are not counted as unemployed.
Gives the impression of a strong labor market, but is it?
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https://www.youtube.com/watch?v=H87fLZ1qIgs&ab_channel=ShowUpRich
He left out a crucial piece of the inflation puzzle: what about the millions in stimulus printed?
Idle money gets killed due to inflation. I'm in a privileged position to be able to save almost 65% of our net household income, placed it on safer investment . The key for us was not spending beyond our means. In this era you have to hold on to every dollar and make it count.
Fake Dollar Illusion..$$
Why her tone sounds sassy? Is it just certain way of people in the states like cali talks?
None you knew about the pandemic, yet you predicting a recession, that already happened two years ago when the world was on lockdown. That was stimulus checks. None you know about finances you just networked with the right people. And repeat whatever others are saying.
American citizens are greedy it's their karma
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Price gouging prior to recession, fed moves targeting individuals, not source of this fake inflation, will hurt doubly bad when the inevitable recession hits. What goes up must come down, except now salaries never go up.
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I love how we're just rolling along with this new definition of recession like they didn't just change it
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I just think this man is laughable, he is trying to signal concern but then tells you not to save now even though most Americans live paycheck to paycheck. He says a recession has to occur to bring down inflationary prices but then mentions we need less workers after saying this is the result of 2 supply shocks. If this recession is lead by a supply problem how will cutting workers help? What about the natural cuts to the workforces that are going to occur, retirement of the boomers?
Even if we cut 3 million job listings from the marketplace we still have steady job numbers.