Real-time US stock currency and international exposure analysis for understanding global business impacts. We help you understand how exchange rates and international operations affect your portfolio companies. Mark Zandi, chief economist at Moody's Analytics, recently pointed to a decline in U.S. job growth following the imposition of Liberation Day tariffs, warning that the economy may be heading toward a recession. In a social media post on May 4, Zandi shared a graph comparing employment and inflation trends since early 2025, suggesting trade policy is weighing on the labor market.
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- Decline in hiring: Zandi's graph shows job growth figures that have trended lower since the Liberation Day tariffs were imposed, compared to the pace seen earlier in 2025.
- Inflation trends: The same chart also tracks inflation over the period, though Zandi's primary focus is on the weakening employment picture as a leading indicator.
- Recession warning: The economist cautioned that without policy adjustments, the U.S. may face a recession, emphasizing the tariffs as a key drag on economic momentum.
- Expert consensus: Zandi's warning echoes similar assessments from other economists, who point to trade uncertainty as a headwind for hiring and capital expenditure.
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Key Highlights
On May 4, Mark Zandi took to X (formerly Twitter) to outline the economic impact of President Donald Trump's tariffs, which were enacted with Liberation Day on April 2, 2025. The Moody's Analytics chief economist posted a graph that tracks job growth and inflation rates starting from January 2025, showing a noticeable slowdown in hiring momentum after the tariffs took effect. Zandi attributed the weakening labor market directly to the trade measures, warning that a recession could be the next stage if current conditions persist.
The post adds to a growing body of commentary from economists flagging the potential risks of sustained tariff burdens. Zandi's analysis aligns with broader concerns that protectionist trade policies may dampen business investment and consumer confidence, leading to slower economic activity. While the job market had shown resilience in 2025, the data Zandi highlighted suggests a turning point after the tariff implementation.
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Expert Insights
Mark Zandi's analysis suggests that the tariffs are exerting a measurable drag on the U.S. labor market, potentially setting the stage for broader economic weakness. While the job market had been a pillar of post-pandemic recovery, the recent deceleration in hiring may indicate that businesses are pulling back amid higher input costs and uncertain demand. Such a slowdown could, in turn, weigh on consumer spending—the primary engine of U.S. growth—and heighten recession risks.
Looking ahead, the interplay between trade policy and the Federal Reserve's inflation fight will be critical. If job growth continues to soften while inflation remains sticky, the Fed may face a difficult balancing act between supporting employment and controlling prices. Zandi's data-driven warning underscores the potential for tariffs to act as a supply-side shock, raising costs for importers and ultimately for consumers. Investors and policymakers may need to monitor labor market reports closely in the coming months, as any further deterioration could accelerate calls for tariff relief or fiscal stimulus.
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