Moody’s Analyst Declares US ‘On the Precipice of Recession’ — Blames Trump Tariffs and Deportations

AP Photo/Mark Schiefelbein

A top economist cited President Donald Trump’s tariffs and immigration policy as the primary reasons he feels the U.S. is nearing a recession.

In a X/Twitter thread posted Sunday morning, Moody’s Analytics chief economist Mark Zandi declared that the country was “on the precipice of recession.” Zandi first pointed to economic indicators from the previous week.

“The economy is on the precipice of recession,” he said. “That’s the clear takeaway from last week’s economic data dump. Consumer spending has flatlined, construction and manufacturing are contracting, and employment is set to fall. And with inflation on the rise, it is tough for the Fed to come to the rescue.”

Days earlier, the Trump administration released massive revisions to its June jobs report. While it was initially reported that nearly 150,000 jobs were added in the month, the Bureau of Labor statistics revealed in August that the number was actually around 14,000. The dismal job numbers led to Trump blaming the commissioner of the bureau and calling for her immediate firing.

Zandi continued his thread by noting how the “shrinking” foreign-born workforce and the president’s tariffs have impacted the economy:

Unemployment remains low, but that’s only because labor force growth has gone sideways. The foreign-born workforce is shrinking, and labor force participation is declining. Telling is the economy-wide hiring freeze, particularly for recent graduates, and the decline in hours worked.

It’s no mystery why the economy is struggling; blame increasing U.S. tariffs and highly restrictive immigration policy. The tariffs are cutting increasingly deeply into the profits of American companies and the purchasing power of American households. Fewer immigrant workers means a smaller economy.

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