Moody’s Flags Recession Risk Climbing Toward 50% on Oil Shock

Moody’s chief economist Mark Zandi says the odds of a U.S. recession are a “serious threat,” with the probability potentially rising above 50% in the next 12 months as oil and gas prices surge amid the U.S.-Iran conflict; before the flare‑up, the model put odds at about 48.6%, and historically nearly every recession since WWII followed a spike in oil prices (except the pandemic). Goldman Sachs meanwhile assigns a 25% recession risk over the next year after a weak February jobs report (−92,000 payrolls vs. +50,000 expected) with the unemployment rate at 4.4%. While higher oil prices can weigh on activity, the U.S.’s status as a net exporter and domestic supply can dampen the impact somewhat. The outlook remains uncertain for investors.