Vital signs for the labor market indicate that it’s getting sicker, and the healthcare sector is one of the few that is keep it from looking even worse.
By contrast, the health care and social assistance sectors added 46,800 jobs, while the leisure and hospitality industry added 28,000. In fact, they have been doing the heavy lifting throughout the year, a trend that concerns Mark Zandi, chief economist at Moody’s Analytics.
Zandi also pointed out that less than half of the industries tracked by BLS have added to payrolls over the past six months, adding that “this only happens when the economy is in recession.”
The diffusion index in the jobs report gauges the concentration of growth. A reading below 50 means more industries cut jobs than added. In August, it was 49.6, and the three-month average was 47.9.
He called the revision to June, which showed a loss of 13,000 jobs, especially significant as downturns are typically dated back to the first month of payroll declines.
Meanwhile, long-term unemployment has ticked higher over the past year, and more than 6 million people outside the labor force now say they want a job, up from roughly 5.7 million about a year ago, according to the BLS.
“This really feels like a jobs recession,” Zandi told Fortune. “Employment is flat to down. Output and incomes are still growing, but the economy is incredibly vulnerable. Nothing else can go wrong, or it could tip us into a full downturn.”
Earlier on Sunday, Treasury Secretary Scott Bessent was asked to respond to Zandi’s jobs recession comment.
“President Trump was elected for change, and we are going to push through with the economic policies that are going to set the economy right. I believe by the fourth quarter, we’re going to see a substantial acceleration,” he predicted.
