In his latest outlook for 2026, Zandi wrote that while the US economy is expanding, the growth is fragile. Zandi said there are several reasons to believe the likelihood of a recession is high.

The economy isn't growing fast enough:
The economy may look strong, but Zandi said that the numbers look misleading. Accounting for the six-week government shutdown, he estimates that real GDP growth in the fourth quarter will be 2%. That's short of the growth rate needed to employ everyone entering the labor force, and continued growth below potential will ultimately be a hindrance to further expansion.

The deteriorating labor market is a recession indicator:
Zandi has repeatedly flagged problems in the labor market as an indication of an oncoming downturn. For 2026, he is still deeply concerned about cracks in the labor market, as the economy isn't able to absorb new labor supply fast enough.

"That unemployment is definitively on the rise is evidence that the economy's 2% underlying growth rate is falling short of its potential rate of growth—the rate at which it needs to grow to employ all those entering the labor force," he noted.

Zandi added that hiring has fallen to levels historically in line with other economic downturn cycles, something that often precedes a recession.

Stock market risk remains high:
Zandi has cautioned against relying on the stock market as an economic scorecard, and has said the wealth effect of rising asset prices could be clouding the broader picture of consumer health.

"If the stock market is a bubble and it bursts, wiping out this wealth, consumer spending will suffer a significant blow, triggering a recession," he stated. "This is precisely what happened in the wake of the bursting Y2K bubble."

https://www.msn.com/en-us/money/markets/3-reasons-the-us-is-closer-to-a-recession-than-gdp-suggests-according-to-a-top-economist/ar-AA1UKkvv?ocid=finance-verthp-feeds