A top U.S. economist recently warned that the country's economy is on the "precipice" of a recession, Business Insider reported on Wednesday, citing Moody's economist Mark Zandi.
While the U.S. is not yet in a technical recession -- defined as two straight quarters of negative growth -- other areas like the labor market have been sounding a warning, according to the report.
Zandi, chief economist at Moody’s Analytics, said if employment falls for more than a month consecutively, the economy has entered a downturn.
Since May this year, employment has barely increased. "Given that the recent revisions to the jobs numbers have been consistently lower, much lower, it wouldn't be surprising if we learn with the coming revisions that employment is already declining," he said.
In July, more than 53 percent of industries reported job cuts, the economist cited recent data.
Zandi concluded that the U.S. economy is still not in a recession, as evidenced by the job decline factor. A recession is defined by a persistent decline in jobs, and the decline lasts for at least a few months, he said.
He also said that the economic tides could shift if policy weighs on growth. In his previous post, Zandi noted that U.S. President Donald Trump's policies, mainly tariffs and immigration, are the big drivers of his view that the economy is teetering at the edge of a downturn.
U.S. job growth slowed sharply in July, with only 73,000 nonfarm jobs added -- 31,000 fewer than economists had forecast, according to data released Friday by the Bureau of Labor Statistics (BLS).
The weaker-than-expected hiring pushed the unemployment rate up to 4.2 percent, from 4.1 percent in June, it said.
Job growth in May was revised down by 125,000 to a gain of just 19,000, while June's total was cut by 133,000, leaving only 14,000 jobs added.
US economy on precipice of recession: economist
As the diplomatic engagement between the United States and Iran continues despite a faltering ceasefire, a former commander of Iran's Islamic Revolutionary Guard Corps (IRGC) has said that Iran is prepared to use military power to break the U.S. maritime blockade should the negotiations collapse or run on too long.
Mohsen Rezaee, who also currently serves as a member of the Iranian Expediency Discernment Council, struck a confident tone about Iran's current trajectory in an exclusive interview with China Global Television Network (CGTN) in Tehran on Wednesday.
He said the country has withstood over two decades of crippling sanctions and continued to move forward.
"We have been under sanctions for more than 20 years. The number of sanctions likely exceeds 2,000, targeting individuals, enterprises, corporations, ships, insurance companies, and even foreign countries that interacted with us. However, we have managed to find solutions to neutralize these sanctions, and we will continue to do so moving forward," he said.
He said Iran aims to ease the sanctions burden through talks with the U.S., although at the same time, he said, Iran is ready to shift to a military response if the path to a peaceful resolution closes.
"Furthermore, we will compel the U.S. to lift these sanctions. We will force the U.S. to end the maritime blockade -- either through negotiations or, should they resist, through direct action and we will attack U.S. warships. Therefore, despite all the pressures, the future of our economy is bright and promising, while the future of the US economy is bleak," he said.
While any new war against Iran would be a dead end, the best way out for the U.S. is to continue talks, according to the senior official.
"We have prepared ourselves so that if the maritime blockade continues beyond a certain timeframe, we will launch an attack and break the blockade. The Americans have no choice but to negotiate. Continuing this war is a journey into a very dark tunnel for the United States. The more America chooses to fight, the deeper it enters a tunnel with no end. Yet for us, the path is perfectly clear. America is moving toward us in the dark, while we are monitoring their every move," he said.
Former IRGC chief says Iran ready to break U.S. naval blockade by force if talks fail
