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The economies of more than 20 states are either in recession or on the verge of recession, according to an analysis by Mark Zandi, chief economist at Moody’s Analytics.
Zandi’s analysis found that, as of the end of August, 21 states and the District of Columbia were either in recession or at high risk. enter recessionIt also found that 13 states are “advancing” while the economies of another 15 states are expanding.
“State-level data makes clear why the US economy is on the brink of recession,” Zandi wrote in a post on X. “Based on my assessment of various data, that makes up about a third of the states.” us gross domestic product are either at recession risk or at high risk, the other third remain stable and the remaining third are growing.”
“The states experiencing the recession are spread across the country, but the broader D.C. area has been hit the hardest by government job cuts,” he said.
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Zandi’s analysis found that 21 states and DC were in recession or at risk of entering one. (Michael Nagle/Bloomberg via Getty Images/Getty Images)
Many of the states identified by Zandi as being in recession or at high risk of recession are notable contributors to the overall US economy in terms of their share of the country. Gross domestic product (GDP),
Illinois (3.85% of US GDP), Georgia (3.03%), Washington (3.02%), New Jersey (2.93%), Massachusetts (2.73%) and Virginia (2.66%) were the largest state economies listed as being in or at high risk of entering a recession.
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Mark Zandi, chief economist at Moody’s Analytics, said it is important for the US economy to keep big state economies like California and New York out of recession. (Al Drago/Bloomberg via Getty Images/Getty Images)
States identified in Zandi’s analysis Economies that are “running on water” Including California (14.5%), New York (7.92%), Ohio (3.14%) and Michigan (2.44%).
States with expanding economies include Texas (9.41%), Florida (5.78%), Pennsylvania (3.54%), and North Carolina (2.86%).
“Southern states are generally the strongest, but their growth is slowing,” Zandi said. “California and New York, which together account for one-fifth of U.S. GDP, are holding their own, and their stability is critical for the national economy to avoid a recession.”
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Federal Reserve Chairman Jerome Powell has said the central bank is monitoring risks from both sides of its dual mandate, which is to promote stable prices and maximize employment. (Kent Nishimura/Getty Images/Getty Images)
Zandi’s analysis has gained attention in recent weeks amid the ongoing government shutdown. The September release has already been delayed jobs report And it is expected that there will be a delay in the release of the Consumer Price Index (CPI) which was due to be released next week.
The Bureau of Labor Statistics announced Friday that it is recalling some workers who were furloughed because of the shutdown to help prepare cpi inflation The report, which will be released on October 24.
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Inflation remains high of the Federal Reserve The target is 2% this year and has increased in recent months as the tariffs take effect.
While Fed policymakers have focused on concerns about inflation cut interest rates for the first time in 2025 last month amid signs of a weakening labor market.
