US Is On Brink Of Recession, Claims Moody's Chief Economist — Check List Of States At Risk

Chief economist at Moody's Analytics Mark Zandi, on Tuesday, said that the state-level data reveal the US economy "is on the edge of recession". Based on Zandi's analysis, states that make up nearly a third of U.S. GDP (gross domestic product) are either in or at high risk of recession.

In an interview with Newsweek, Zandi said, "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."

Zandi said that he doesn't think the economy is in a recession at the moment, but he feels like it's on the brink. He said the economy is very close to a recession, based on data about spending, jobs, and manufacturing. Zandi's worries come mainly from tariffs hurting American company profits and ongoing troubles in the US housing market.

Along with the recession, Zandi said he anticipates the annual inflation rate, which is currently at 2.7%, to increase above 3% and approach 4% by this time next year.

"Prices are already rising; you can see it in the data, but it's going to rise to a degree that it will be impossible for people to ignore. They will see it clearly in the things that they're buying on an everyday basis," Zandi told Newsweek.

Here is a full list of states that are either in or at risk of recession, or states that are expanding based on Zandi's analysis:

1. 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.

2. Treading Water: Missouri, Ohio, Hawaii, New Mexico, Alaska, New York, Vermont, Arkansas, California, Tennessee, Nevada, Colorado, Michigan.

3. Expanding: South Carolina, Idaho, Texas, Oklahoma, North Carolina, Alabama, Kentucky, Florida, Nebraska, Indiana, Louisiana, North Dakota, Arizona, Pennsylvania, Utah, Wisconsin.

Zandi shared a chart that sums up the state of the US economy. In a post on X, he wrote, "If there is one chart that sums up the state of the U.S. economy, it is this one courtesy of my colleague, economist Matt Colyar. It shows the growth in total consumer spending after inflation since the 4th quarter of the preceding year for every year since 2000. Spending this year through July has barely budged from last year’s end – worse than any year since 2008-09. We all know what was going on then. This year’s sideways consumer spending isn’t consistent with a recession, but it is with an economy on the brink of one."

It must be noted that Zandi was one of the first economists to forecast the 2008 financial crisis.