Moody's Mark Zandi Warns Of 'Uncomfortably High' 48% Probability Of US Recession In Next 12 Months - SPDR S&P 500 (ARCA:SPY)

Economic Outlook - The U.S. economy faces a 48% probability of entering a recession within the next 12 months, as stated by Mark Zandi, Chief Economist at Moody's Analytics [1][2] - This forecast is based on a newly unveiled leading economic indicator derived from a machine learning algorithm, indicating an unprecedented level of risk [2][6] Labor Market Conditions - Zandi has expressed concerns about a deteriorating labor market, describing it as being in a "jobs recession" with hiring flatlining and momentum vanishing [2][3] - Revisions in June's data revealed a shrinking workforce for the first time since 2020, reinforcing the notion of a jobs recession [3] Layoff Trends - The absence of widespread layoffs is currently seen as a positive sign, but Zandi warns that if layoffs begin, it could lead to an overall economic downturn [4] - States accounting for nearly a third of national output are either in or at high risk of recession, with concentrated weakness noted around the Washington D.C. area due to federal workforce cuts [4] Market Reactions - Anticipated interest rate cuts may provide some relief, but much of this benefit has already been factored into market expectations [5] - The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ) showed mixed performance, with SPY down 0.033% and QQQ up 0.44% [7]