Economist Mark Zandi of Moody’s Analytics warns that the risk of a U.S. recession over the next 12 months has climbed to an “uncomfortably high” 48%. This elevated probability is largely driven by several weakening economic indicators and policy pressures.
One major concern is the sharp drop in residential building permits, a key early-warning signal. As demand softens, builder activity is scaling back, and there are growing inventories of unsold homes. These trends suggest trouble ahead in sectors linked to construction and housing.
Another issue is the slowing labor market. Job growth has cooled down, and while layoffs haven’t become widespread, many businesses seem hesitant to hire or invest. Inflation remains elevated, further eroding consumer spending power. Tariffs, restrictive immigration policies, and uncertainty in trade are adding to the stress on key industries. 
While an interest rate cut by the Federal Reserve is expected soon, Zandi cautions that it might not be enough to prevent a downturn given the breadth of challenges. Regional data shows that a significant portion of U.S. states are already seeing economic strain. The window for averting recession appears narrow unless policy support or demand improves quickly.
