Moody's: 21 U.S. States Including Washington D.C. at Risk of Recession

It has been analyzed that more than 20 states in the United States have either fallen into recession or are on the verge of a recession.

Reuters Yonhap News

According to an analysis by Mark Zandi, Chief Economist at Moody's Analytics, as of the end of August, 21 U.S. states and Washington D.C. were assessed to be either in a state of recession or at risk of entering one, Fox Business recently reported. In addition, the economies of 13 states were found to be 'stagnant,' while the remaining 15 states were analyzed to be in an expansion phase.

In a post on X (formerly Twitter), Zandi stated, "State-level data clearly shows why the U.S. economy is on the brink of recession." He explained, "When aggregating various data, about one-third of the states, which account for roughly one-third of U.S. gross domestic product (GDP), are either in a recession or at high risk of one; another third are stagnant, and the remaining third are growing."

He added, "While states experiencing recession are distributed nationwide, the Washington D.C. area stands out in particular due to the impact of government job cuts." States assessed to be either in recession or at high risk include Illinois, Georgia, Washington, New Jersey, Massachusetts, and Virginia.

California and New York, which account for 14.5% and 7.92% of U.S. GDP respectively, as well as Ohio and Michigan, were evaluated as having 'stagnant' economies. Meanwhile, Texas and Florida, which contribute 9.41% and 5.78% of U.S. GDP respectively, along with Pennsylvania and North Carolina, were found to be showing economic growth.

Zandi noted, "States in the South are generally performing the strongest, but their growth is slowing." He emphasized that in order for the national economy to avoid a downturn, the economies of California and New York-which together account for more than one-fifth of U.S. GDP-must remain stable.

Fox Business reported that Zandi's analysis is drawing attention as the release of various government statistics has been delayed due to the U.S. federal government shutdown (temporary suspension of government work). As a result of the shutdown, the release of the September nonfarm payroll report was delayed, and the September Consumer Price Index (CPI) statistics, which were scheduled to be released on the 15th of this month, have also been postponed to the 24th.