Top Economist Highlights Fragility in US Economic Growth Amid Rising Risks
Top Economist Warns US Economy Is More Fragile Than It Looks: 'The Situation Is Tenuous'

Image: Benzinga
Mark Zandi, Chief Economist at Moody's Analytics, warns that the US economy is growing below its potential, risking rising unemployment and inflation. Despite a projected 2% GDP growth, factors like the Iran conflict and stagnant job growth threaten economic stability.
- 01Zandi projects real GDP growth of about 2% for the second quarter, but warns it is below potential.
- 02Unemployment has risen above 4%, with job growth stagnating since April 2025.
- 03Inflation is currently above 3%, complicating the Federal Reserve's ability to lower interest rates.
- 04Zandi emphasizes that the economic benefits of tax cuts are being offset by rising gasoline prices due to geopolitical tensions.
- 05He suggests avoiding a recession will depend on resolving the Iran conflict and sustaining growth driven by artificial intelligence.
Advertisement
In-Article Ad
Mark Zandi, the Chief Economist at Moody's Analytics, has issued a stark warning regarding the fragility of the U.S. economy, stating it is growing at a rate below its potential. He noted that while the economy is projected to grow by approximately 2% in the second quarter, this growth is insufficient to prevent rising unemployment and inflation. Zandi highlighted that unemployment has crept above 4%, with job growth stagnating since April 2025, and a notable decline in labor-force participation, particularly among older workers. The inflation rate, currently above 3%, poses a challenge for the Federal Reserve, limiting its options for interest rate cuts. Zandi cautioned that geopolitical factors, including the ongoing conflict involving Iran, are exacerbating inflation and undermining economic stability. He believes that while a recession is not inevitable, avoiding one will require an end to the Iran conflict and continued growth fueled by artificial intelligence. Zandi's insights underscore the precarious state of the economy, which, despite its resilience, faces significant risks.
Advertisement
In-Article Ad
The rising unemployment and inflation could lead to higher costs for consumers and reduced spending power.
Advertisement
In-Article Ad
Reader Poll
What do you think will happen to the US economy in the next year?
Connecting to poll...
More about Moody's Analytics
Read the original article
Visit the source for the complete story.



