Is the U.S. economy really approaching a recession, or are we spooked by one ugly jobs report? Anxiety is climbing after July's jobs data landed with a thud: just 73,000 jobs added and a combined 258,000 downward revisions for May and June—the largest two-month cut in nearly half a century. Job growth has slumped to an average of 35,000 per month over the past quarter, versus 128,000 previously.
Why does this matter? Past revisions this big have typically accompanied recession onsets. As Mark Zandi of Moody's put it, "The economy is on the precipice of recession." Further, GDP growth in the first half lagged at 1.2%, half last year's rate.
- Consumer spending on durable goods declined by $40B since April
- The Institute for Supply Management Services Index dropped to 50.1 (from 50.8), signaling slowing services demand
- Unemployment rate inched up to 4.2%
As households tighten belts, even the bullish point—no broad-based layoffs—now feels less reassuring. Economists warn: another soft jobs report could bring recession reality much closer.
