Economist Henrik Zeberg is warning that the U.S. economy is approaching a recession, pointing to a sharp deterioration in nonfarm payroll data and a historically reliable labor-market signal that has preceded every downturn since the 1970s.
Zeberg’s analysis centers on recent revisions to U.S. jobs data, which show a much weaker labor market than initially reported, signaling a recession may be on the horizon, according to his analysis shared in an X post on January 8.
Notably, October 2025 payrolls were revised down significantly, revealing a loss of 173,000 jobs instead of the previously reported 105,000 decline. November job growth was also revised lower, to 56,000 jobs.
These back-to-back downward revisions point to a clear slowdown in hiring momentum and highlight how headline figures initially masked underlying weakness.
More critically, Zeberg emphasized the behavior of the 12-month moving average (MA) of job creation. This measure smooths out monthly volatility and has historically fallen below a specific threshold at the onset of every U.S. recession since the 1970s.
According to his outlook, the moving average has now dropped below those recession-entry levels, despite today’s labor market being far larger than in past cycles. That breach is the core of Zeberg’s recession signal.
Disappointing job data
Notably, the latest December 2025 jobs report adds context to this warning rather than contradicting it. Employers added roughly 50,000 jobs during the month, avoiding an outright contraction but marking one of the weakest December readings outside a recession in decades.
When combined with the steep October job losses and softer November growth, the December figure reinforces the picture of a labor market that is losing momentum rather than stabilizing.
Indeed, Zeberg has been cautious on the economy for an extended period, warning that investors should anticipate a historic crash.
However, before such a crash materializes, several sectors, including stocks and cryptocurrencies, are likely to hit new record highs.
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