Frank Nez 
On August 29, 2025, Moody’s Analytics chief economist Mark Zandi warned that the U.S. economy is teetering on the edge of a recession, with President Donald Trump’s aggressive tariffs and immigration restrictions driving a slowdown that threatens widespread job losses.
In an interview with Newsweek, Zandi highlighted a bleak economic outlook, noting that July’s jobs report showed just 73,000 jobs added—far below expectations—and 17 states, representing 29% of GDP, are stagnating or contracting.
With consumer spending flat and inflation rising, the combination of policy-induced pressures and weak economic indicators has heightened fears of a downturn, challenging Trump’s claims of economic strength as public unease grows ahead of the 2026 midterms.
Economic Warning Signs Are Intensifying
Zandi told Newsweek, “The economy is on the precipice of recession,” pointing to a string of troubling data.
The Bureau of Economic Analysis reported a 1.2% annualized GDP growth rate for the first half of 2025, down from 2.8% in 2024.
July’s job growth of 73,000 missed forecasts of 100,000, with revisions cutting May and June gains by 258,000, per The Economic Times.
The unemployment rate rose to 4.3%, triggering the Sahm Rule—a recession indicator activated when unemployment climbs 0.5 percentage points within a year.
Trump’s tariffs, including a 10% universal levy and up to 145% on Chinese goods, have increased costs for businesses and consumers.
Wisconsin Aluminum Foundry CEO Sachin Shivaram reported a 35-40% drop in orders and layoffs due to a tripling of aluminum prices, as earlier reported by FrankNez Media.
Zandi noted that these policies, combined with immigration restrictions reducing the foreign-born workforce by 1.2 million, are “squeezing the economy.”
Core inflation hit 2.8%, and consumer spending, which drives 70% of GDP, also contributed just 0.4 percentage points to Q1 growth.
The Impact of Trump’s Policies
Trump’s trade war has sparked retaliatory tariffs from Canada, China, and the EU, further straining supply chains.
The Yale Budget Lab estimated that the tariffs add a $1,300 tax burden per U.S. household in 2025.
Zandi warned that the tariffs’ “biggest impact is on confidence,” discouraging business investment and hiring.
The foreign-born workforce decline, driven by mass deportation efforts like those at the now-closed “Alligator Alcatraz” facility, has tightened labor markets.
Despite these concerns, Trump and Commerce Secretary Howard Lutnick have dismissed recession fears.
Lutnick, on NBC’s Meet the Press, claimed, “There’s going to be no recession in America,” touting tariffs as a boost to U.S. wealth.
However, J.P. Morgan raised its recession odds to 40%, and Goldman Sachs adjusted theirs from 15% to 25%.
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Public and Expert Reactions
On X, @BizToc amplified Zandi’s warning, noting that one-third of the U.S. economy is at risk.
Critics like Sen. Ron Wyden called Trump’s tariffs “chaotic,” while Rep. Rosa DeLauro accused him of betraying promises to lower costs.
MAGA supporters on the other hand defended the policies as protecting American jobs.
Economists are also quite divided.
Steve Hanke, a former Reagan adviser, pegged recession odds at 80-90%, citing a stagnant money supply.
Conversely, Brown University’s Mark Blyth cautioned against overreacting to the jobs report, telling ABC News, “It’s too early to see whether this is a trend.”
The National Bureau of Economic Research has not declared a recession, but the inverted yield curve, ongoing since June 2022, signals a 94% historical likelihood of one, per Forbes.
As the 2026 midterms approach, Trump’s ability to navigate these economic headwinds will be critical.
Zandi’s warning underscores the need for policy adjustments to avert a downturn, but Trump’s commitment to tariffs and immigration crackdowns may deepen the economic strain, shaping the political landscape.
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