Moody's Analytics Chief Economist Mark Zandi has highlighted that the United States continues to face recession risks despite posting strong job numbers in the month of March.
In a post on the social media platform X, Zandi said: "Recession risks thus remain uncomfortably high, with close to even odds of a downturn in the coming year."
He has considered a particular index for his estimation of recession, called the Vicious Cycle Index, which indicated a positive signal for recession. The index was developed by Zandi and his team at Moody's.
The Vicious Cycle Index is a labour force-adjusted version of the Sahm Rule that uses the unemployment rate to account for changes in labour force participation, providing a signal of recession risk when participation is shifting, according to Zandi.
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Don't take solace in the big March payroll employment gain. It comes after a big decline in February, when brutal winter weather and a labor strike at Kaiser Permanente weighed heavily on jobs. Abstracting from the vagaries of the monthly data, few jobs have been added since…
— Mark Zandi (@Markzandi) April 6, 2026
Warning over the March employment data, Zandi noted that these numbers come after a significant drop in the previous month, which highlighted the impact of winter and labour strike at Kaiser Permanente
Don't take solace in the big March payroll employment gain. It comes after a big decline in February, when brutal winter weather and a labour strike at Kaiser Permanente weighed heavily on jobs.
Flagging US-Iran War, the Moody's chief economist said, "Abstracting from the vagaries of the monthly data, few jobs have been added since Liberation Day a year ago, and without healthcare, the economy would be losing jobs. And all of this before the economic fallout from the hostilities with Iran hits."
In March, US labour market bounced, reported stronger than expected job creation data. The non-farm payrolls increased to 1,78,000 in the month from 1,33,000 in February, signifcantly higher than the Dow Jones consensus estimate of 59,000, according to data released by Bureau of Labor Statistics on Friday. Meanwhile, unemployment rate remained largely unchanged at 4.3%.
Healthcare has primarily led the growth, with the sector adding 76,000 jobs, followed by construction workers which grew by 26,000 in March but had shown little net change over the prior 12 months and transportation and warehousing added 21,000 jobs.
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