According to Mark Zandi, Chief Economist at Moody’s Analytics, many states are more vulnerable to or have already entered an economic downturn.
“Based on my assessment of various data, states making up nearly a third of U.S. GDP are either in or at high risk of recession,” Zandi posted to X on Sunday. “Another third are just holding steady, and the remaining third are growing.”
One of the most prominent economists to warn about the present situation and future direction of the American economy is Zandi. He said earlier this month that recent data on manufacturing, jobs, and spending showed that the entire economy was on the “precipice of recession,” In addition to the persistent downturn in the U.S. housing market, tariffs—which he has characterized as “cutting increasingly deeply into the profits of American companies”—have been a major factor in his worries.
Each state’s current “business cycle,” according to expert Mark Zandi
Here is a breakdown of Zandi’s lists, in which states have been ranked “from strongest to weakest:”
- Expanding: South Carolina, Idaho, Texas, Oklahoma, North Carolina, Alabama, Kentucky, Florida, Nebraska, Indiana, Louisiana, North Dakota, Arizona, Pennsylvania, Utah, Wisconsin.
- Recession/High Risk: Wyoming, Montana, Minnesota, Mississippi, Kansas, Massachusetts, Washington, Georgia, New Hampshire, Maryland, Rhode Island, Illinois, Delaware, Virginia, Oregon, Connecticut, South Dakota, New Jersey, Maine, lowa, West Virginia, District of Columbia.
- Treading Water: Missouri, Ohio, Hawaii, New Mexico, Alaska, New York, Vermont, Arkansas, California, Tennessee, Nevada, Colorado, Michigan.
“Many of these states lean heavily on farming or on import and trade activity. Those are exactly the industries most exposed under current trade policies,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.
The national economy contracted for the first three months since early 2022, according to a June study from the Bureau of Economic Analysis (BEA), which also showed that GDP had decreased in 39 states during the first quarter of 2025. Nonetheless, a preliminary estimate published in late July showed a strong recovery in the second quarter, with GDP expanding by a better-than-anticipated 3% annually. On September 25, the BEA’s final estimate will be released along with state-level statistics.
“For the average American, that risk shows up in two ways. It means higher prices at the store, and it means job disruption across industries tied to food, goods, and transportation,” Thompson said.
When Newsweek asked Zandi about his approach, he replied that the list was “a subjective assessment based on various coincident measures of economic activity,” such as industrial production and payroll employment.
“If the preponderance of these coincident measures is exhibiting a persistent decline then I consider it to be in or at serious risk of recession,” Zandi said, adding that his methodology was employed by the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER).
The most recent nonfarm payroll data, which showed that the economy added just 73,000 jobs in July, fell significantly short of forecasts. The Bureau of Labor Statistics (BLS) commissioner was fired by President Donald Trump as a result of this and downward changes to data from May and June.
Zandi told Newsweek that all the indicators of an imminent recession were already present. Zandi was among the first economists to predict the 2008 financial crisis.
“I don’t think the economy is in a recession, at least not at this point,” he said, “but it feels like it’s on the brink, it’s on the precipice of this recession.”
Job growth has stalled to what Zandi described as a “virtual standstill.”
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