According to Mark Zandi, chief economist at Moody’s Analytics, the US economy is likely already in a recession. His conclusions are based on a new indicator dubbed the "Vicious Cycle Index" (VCI). The expert believes that this tool has provided a clear signal of the onset of a recession in the first quarter of 2026.

The VCI is grounded in the principles of the well-known Sahm Rule, which associates an economic downturn with a sharp increase in unemployment levels. Using this methodology, a recession is identified when the three-month moving average of the indicator rises by half a percentage point. Zandi has adapted this model to account for more profound structural changes in the labor market.

Unlike traditional methods, the VCI tracks a five-year moving average of the labor force participation rate. As of January this year, the indicator surpassed the critical threshold of one, signaling that the economy is entering a contraction phase due to an increase in the number of individuals who have effectively stopped searching for work.

Employment statistics in recent months have shown high volatility and instability. In March, the United States added 178,000 jobs, which technically exceeded analysts' expectations. However, this followed a sharp reduction in February, when the national labor market lost 92,000 positions.

Zandi notes that, excluding the healthcare sector, the US economy has been losing jobs for the past year. Additionally, the effects of recent military actions involving Iran are contributing further pressure to macroeconomic metrics. At present, specialists assess the odds of a deeper economic downturn as being 50-50.