Bond markets often expose problems before equities do. Credit ratings, default probabilities, and spread analysis to sniff out risk from the credit side early. Understand credit risk with comprehensive analysis tools. Mark Zandi, chief economist at Moody’s Analytics, has warned that U.S. job growth has slowed significantly since the implementation of President Donald Trump’s tariffs. In a social media post earlier this month, Zandi cited data comparing employment and inflation trends since January 2025, suggesting the trade measures could push the economy toward a recession.
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- Mark Zandi, chief economist at Moody’s Analytics, posted on May 4, 2026, showing a decline in U.S. job growth after the April 2025 tariff implementation.
- Zandi pointed to President Trump’s “Liberation Day” tariffs as the primary cause of the labor market softening.
- The economist warned that continued tariff pressure could push the U.S. economy toward a recession, as both hiring and consumer confidence appear to weaken.
- Zandi’s graph compared job growth and inflation since January 2025, suggesting that while hiring slowed, price pressures remained stubborn.
- The post has drawn significant attention on social media, reflecting heightened uncertainty among investors and policymakers about the direction of the economy.
- Market participants are now watching for further employment and inflation data to assess whether the slowdown is transitory or the beginning of a broader downturn.
- No specific job numbers or inflation rates were disclosed in Zandi’s post, but the trend is consistent with other recent surveys showing softening labor demand.
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Key Highlights
The impact of President Donald Trump’s tariff policy on the U.S. labor market has drawn a stark warning from Moody’s Analytics chief economist Mark Zandi. In a post on X (formerly Twitter) dated early May, Zandi released a graph that compared job growth and inflation metrics from January 2025 onward, highlighting a notable deceleration in hiring activity after the so-called “Liberation Day” tariff announcements on April 2, 2025.
Zandi attributed the slowdown directly to the tariff regime, stating, “If you’re struggling to find a job, you have tariffs to blame.” He cautioned that the mounting economic pressure may signal the onset of a recession, as trade barriers continue to weigh on business confidence and consumer spending. The post drew widespread attention, with over 2,000 shares and comments from economists and market watchers questioning the sustainability of the current expansion.
The Moody’s economist’s analysis suggests that job gains, which had been steady earlier in 2025, lost momentum following the escalation of trade tensions. While the exact employment figures were not provided in Zandi’s post, the trendline he displayed indicated a clear downward inflection point coinciding with the tariff timeline. Simultaneously, inflation showed signs of firming, creating what some analysts describe as a “stagflationary” risk for the world’s largest economy.
The warning comes at a time when the Federal Reserve is closely monitoring both employment and price data. A sustained hiring slowdown could complicate the central bank’s rate path, especially if inflation remains elevated. No official government employment data for the most recent month has been released yet, but Zandi’s analysis relies on private payroll data and real-time indicators available through his firm’s models.
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Expert Insights
Mark Zandi’s assessment adds a prominent voice to a growing chorus of economists who question the net economic impact of broad-based tariffs. The Moody’s Analytics chief has long been a respected independent forecaster, and his decision to highlight the job growth slowdown on a public platform suggests a level of concern that may resonate with policymakers.
From an investment perspective, the implications are multifaceted. A sustained deceleration in hiring could lead to weaker consumer spending, which accounts for roughly two-thirds of U.S. GDP. If inflation remains sticky, the Federal Reserve may face a difficult trade-off between supporting employment and containing prices. Rate cuts might become necessary, but such a move could be delayed if inflationary pressures persist — a scenario that would likely increase market volatility.
Sectors most exposed to trade flows — including industrial manufacturing, agriculture, and certain technology supply chains — could experience disproportionate headwinds. Conversely, domestically oriented services and defensive stocks might see relative stability if the slowdown remains contained.
It is important to note that Zandi’s analysis relies on a specific time window and may not fully account for potential offsetting factors such as fiscal stimulus or supply chain adjustments. No official recession call has been made, and other indicators — such as corporate earnings and consumer balance sheets — remain mixed. The next set of labor market data will be crucial in validating or challenging this bearish outlook.
As always, investors are advised to maintain a diversified portfolio and avoid making directional bets based on any single economist’s forecast. The current environment underscores the value of risk management and a focus on long-term fundamentals.
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