The most troubling feature of the job market is how thinly spread gains are, top economist says — ‘this only happens when the economy is in recession’

The latest jobs report revealed the U.S. economy added just 22,000 jobs in August with revisions to prior months showing June actually saw a decline. Meanwhile, the unemployment rate edged up to a four-year high of 4.3%.

In a note on Saturday, Torsten Sløk, chief economist at Apollo Global Management, observed that job growth in tariff-impacted sectors is negative. Manufacturers alone cut 12,000 workers last month.

By contrast, the health care and social assistance sectors added 46,800 jobs, while the leisure and hospitality industry added 28,000. In fact, they have been doing the heavy lifting throughout the year, a trend that concerns Mark Zandi, chief economist at Moody’s Analytics.

“What’s perhaps most disconcerting about the flagging job market is how dependent it is on healthcare and hospitality for what little job growth is occurring,” he wrote on X on Sunday. “Since the beginning of the year, the economy has created a paltry 600k jobs, but without the job growth in these industries, there would be zero job growth.”

The year-to-date gains of the health care and social assistance sectors plus the leisure and hospitality industry total 855,900, according to data from the Bureau of Labor Statistics, meaning the economy would actually be in the hole by more than 250,000 jobs if not for those groups.

Zandi also pointed out that less than half of the industries tracked by BLS have added to payrolls over the past six months, adding that “this only happens when the economy is in recession.”

The diffusion index in the jobs report gauges the concentration of growth. A reading below 50 means more industries cut jobs than added. In August, it was 49.6, and the three-month average was 47.9.

‘Jobs recession’

Zandi has been steadily ringing alarms bells on the economy. Last month, after the shockingly bad July jobs report, he warned that “the economy is on the precipice of recession,” pointing to weak consumer spending and shrinkage in construction and manufacturing.

After the August jobs report was released on Friday, Zandi told Fortune’s Eva Roytburg that the economy is on the edge of recession and may already be in one.

He called the revision to