Moody’s Analytics chief economist Mark Zandi has warned that Friday’s release of the August jobs report by the Bureau of Labor Statistics could be decisive in determining whether the U.S. economy is already in recession.

Indeed, Zandi painted a concerning picture, predicting payrolls will rise by just 50,000 while the unemployment rate climbs to 4.3%, according to an X post on September 2.

The report will also include revisions to June and July data, along with a preview of the March 2025 benchmark revision, with Zandi anticipating further downward adjustments.

According to him, if revisions turn modest gains into outright losses, it could reignite debate over whether a contraction is underway. 

But if August data looks stronger with milder revisions, attention may shift to the reliability of the numbers, especially after last month’s accuracy controversy.

“This coming Friday’s release of the jobs report for August by the Bureau of Labor Statistics will be critical in gauging the threat of recession.<…> With the revisions, it is conceivable that the recently paltry job gains turn into losses. If so, there will be a legitimate debate over whether the economy is already in a recession,” Zandi said. 

Zandi’s bearish economic outlook 

It’s worth noting that Zandi has repeatedly cautioned that the economy is fragile, estimating that a third of the country is already in or near recession and another third is stagnating. 

To this end, as reported by Finbold, he singled out California and New York, states that together account for more than a fifth of U.S. GDP, as crucial to the national outlook.

At the same time, the expert has pointed to three major warning signs, including stalled payroll growth since May, job losses in more than half of U.S. industries in July outside of healthcare, and a distorted unemployment rate affected by shifts in labor force participation, particularly among foreign-born workers.

Policy uncertainty is also weighing on growth. Tariffs, stricter immigration rules, and spending cuts are eroding business confidence and slowing hiring. 

Notably, tariffs risk pushing consumer prices higher, while immigration restrictions are worsening labor shortages in agriculture, construction, hospitality, and elder care. 

Even so, Zandi sees resilience in the technology sector, where innovation and immigrant labor continue to provide support.

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