More than half of industries already allow workers, a “revealing” sign that is accompanied by past recessions, says the best economist

In a series of X messages on Sunday, he followed his warning last weekend that the economy is on the verge of a recession.

This time, Zandi stressed that the start of a recession is often not clear that after the fact, noting that the National Bureau of Economic Research is the official referee of the moment when we start and ends.

According to the NBER, a recession implies “a significant drop in economic activity that spreads in the economy and lasts more than a few months”. It also examines a range of indicators, including personal income, employment, consumer spending, sales and industrial production.

Zandi said that payroll data is by far the most important data point and that the drop of more than a month would consecutively indicate a slowdown. Although employment has not yet started to fall, it has barely grown since May, he added.

The payroll increased by only 73,000 last month, well below the forecasts of around 100,000. Meanwhile, the Mayan count was revised from 144,000 to 19,000, and the total of June was reduced from 147,000 to only 14,000, which means that the average gain in the last three months is now only 35,000.

Because recent revisions have always been much lower, Zandi said it would not be surprised if the subsequent revisions show that employment is already decreasing.

“It is also indicative that employment decreases in many industries. In the past, if more than half of the 400 industries of the payroll survey that lost jobs, we were in recession,” he added. “In July, more than 53% of industries reduced jobs and only health care added significantly to pay.”

Last week, Zandi said that data often comes from major revisions when the economy is at a inflection point, as a recession. And on Wednesday, the governor of the federal reserve, Lisa Cook, also noted that the important revisions are “typical of turns” in the economy.

For the moment, the GDP of the GDP of Atlanta Fed indicates continuous growth, and the forecasts in the third quarter even increased up to 2.5% compared to 2.1% last week, although it is still a slowdown of 3% in the second quarter.

There are also no signs of mass dismissals because weekly unemployment complaints have not increased, and the unemployment rate has barely changed, bouncing in a tight range between 4% and 4.2% for more than a year.

But Zandi said that the unemployment rate will be a “particularly mediocre barometer of the recession” because the recent decrease in the number of workers born abroad has maintained the active population.

“Also note that a recession is defined by a persistent drop in jobs-the decline lasts at least a few months. We are not yet there, and so we are not in recession,” he said. “Things could still turn around if economic policies weighing on the economy are soon to rise. But it seems more and more improbable. ”

Wall Street is divided on what job data say, some analysts attributing the slowdown to the low demand for labor while others blame the offer of weak labor in the midst of the repression of immigration by President Donald Trump.

Bank of America falls into the supply camp and said that “the markets confuse the recession with stagflation”. But UBS warned against low demand, stressing that the average work week is lower than the 2019 levels, and said that the labor market showed signs of “dropout speed”.

Last week, JPMorgan economists also struck the alarm during a potential slowdown. They have noted that the data on jobs show that hiring in the private sector has cooled with an average of only 52,000 in the last three months, with sectors outside health and education.

Coupled with the absence of signs that undesirable separations increase due to immigration policy, it is a strong signal that the commercial demand for work has cooled, they said.

“We have constantly pointed out that a slide from the demand for labor of this magnitude is a recession alert signal,” added JPMorgan. “Companies normally maintain hiring gains thanks to growth downgrades which they perceive as transitional. In the episodes where the workforce slides with growth feedback, it is often a precursor of warming. ”