US Job Market Teeters on Recession Edge as August Report Reveals Alarming Weakness

The U.S. labor market is flashing critical warning signs, with economists like Mark Zandi of Moody’s Analytics asserting the economy is likely “on the edge of recession and may already be in one.” The August jobs report, released just days ago, painted a grim picture, showing a paltry 22,000 jobs added, coupled with revisions indicating a decline in June. This comes as the unemployment rate ticked up to a four-year high of 4.3%.

What’s particularly troubling is the narrowness of job growth. Without the healthcare and hospitality sectors, the economy would have seen zero net job creation this year, and indeed, would be in a deficit of over 250,000 jobs. Healthcare and social assistance, along with leisure and hospitality, were responsible for adding 855,900 jobs year-to-date, masking widespread weakness.

Torsten Sløk, chief economist at Apollo Global Management, highlighted negative job growth in tariff-impacted sectors, with manufacturers alone shedding 12,000 workers last month. Zandi noted that less than half of tracked industries added payrolls in the past six months, a trend he warns “this only happens when the economy is in recession.” The jobs report’s diffusion index, which gauges growth concentration, stood at a concerning 49.6 in August, with a three-month average of 47.9 – readings below 50 indicate more industries cutting jobs than adding them.

This latest data amplifies Zandi’s earlier warnings of a “jobs recession,” underscoring deepening concerns about the health of the U.S. economy.

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