U.S. Labor Market Losing Momentum: Mark Zandi

Moody’s chief economist Mark Zandi recently summed up the state of the US economy.

Zandi’s point underscores a growing imbalance that makes the economy feel far shakier. (Photo: MGIC Investment Corp.) 

Though he indicated that GDP “looks OK,” job growth has slowed substantially, and AI-driven productivity gains could potentially outpace job creation, he said in an interview with Moz Farooque of The Street.

Zandi’s point underscores a growing imbalance that makes the economy feel far shakier.

He offered six blunt words: the labor market is losing a ton of momentum. While things may look relatively smooth based on aggregate output, job creation has softened, and hiring rates have slowed.

Simultaneously, productivity is currently running at nearly 2% and could jump toward 2.5% as AI spreads deeper into workflows.

Interestingly, Goldman Sachs CEO David Solomon struck a more optimistic tone compared to Zandi.

Solomon said that the 2026 economic setup is “quite good,” spearheaded by catalysts including AI capital expenditures, fiscal support, and the reopening of deal and IPO pipelines.

Moreover, Bank of America CEO Brian Moynihan echoed that optimism at the ground level, highlighting that consumer activity is running 5% above last year.

However, if demand does not rise quickly enough to absorb productivity gains, unemployment levels could begin to increase.