‘Fodder for a recession’: Top economist Mark Zandi warns about so many Americans ‘already living on the financial edge’ in a K-shaped economy 

Mark Zandi is worried that the labor market no longer has a buffer.

So many Americans are “already living on the financial edge,” the chief economist for Moody’s Analytics told Fortune. If they start to pull back, that’s “fodder for a recession.”

The stark assessment comes as hiring has stalled, unemployment is rising—especially for the most vulnerable workers—and layoff announcements are piling up. To Zandi, the next stage is already visible: “If we actually do see layoffs pick up,” he told Fortune, “then it certainly would be a jobs recession.”

Zandi reached that assessment before the government released its long-delayed JOLTS report Tuesday, but the official numbers largely confirm the pullback he has been tracking through private data. Since the summer, job openings have risen by only a few hundred thousand and remain far below the highs seen in the frenzy of the pandemic. Layoffs upticked slightly, while quit rates fell, a sign that workers are increasingly hesitant to leave their current positions. Hiring, meanwhile, has held at 3.2%, a level consistent with employers who are not actively slashing staff but are no longer expanding their workforces either: a “low hire, low fire” market. 

If the cooling in the official data looks slow, the private indicators tell a sharper story. ADP’s November