Amid lingering speculation about the health of the U.S. economy, insights from Mark Zandi, chief economist at Moody’s Analytics, suggest that a recession may already be underway.

His warning centered on labor market data, where he pointed to the heavy reliance on two sectors, healthcare and hospitality, for what little job growth has occurred this year, Zandi said in an X post on September 7.

Since the start of 2025, the economy has added only about 600,000 jobs. Therefore, without gains in healthcare and hospitality, overall job creation would have been essentially flat.

“What’s perhaps most disconcerting about the flagging job market is how dependent it is on healthcare and hospitality for what little job growth is occurring,” Zandi said. 

To this end, the expert noted that this concentration of hiring points to weakness across most industries, suggesting the recovery lacks breadth.

Fewer industries adding payrolls 

Notably, Zandi reinforced his insights with data from the Bureau of Labor Statistics payroll employment survey. Specifically, the data showed that fewer than half of the industries measured have expanded payrolls in the past six months, a threshold that historically coincides with recessions.

According to the latest August reading, just 48% of industries added jobs, slipping below the neutral 50% line.

Interestingly, payroll expansion data from the past three decades shows that similar drops have aligned with downturns, including the recessions of the early 2000s, the 2008 financial crisis, and the pandemic-driven collapse in 2020. Each time the share of industries adding jobs fell below half, the economy was already in recession.

However, Zandi’s concerns extend beyond labor data. He has warned that many states, accounting for nearly a third of the U.S. economy, are already weakening or at high risk of recession. 

Meanwhile, the economist has cautioned that even if the Federal Reserve cuts interest rates, it may not be enough to avert a downturn, as tariffs and immigration limits weigh heavily on profits, hiring, and labor participation.

Featured image via Shutterstock