{"id":94199,"date":"2025-08-25T08:15:06","date_gmt":"2025-08-25T08:15:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/94199\/"},"modified":"2025-08-25T08:15:06","modified_gmt":"2025-08-25T08:15:06","slug":"a-third-of-the-u-s-economy-is-already-in-a-recession","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/94199\/","title":{"rendered":"A third of the U.S. economy is already in a recession\u2026"},"content":{"rendered":"

After saying that the U.S. is on the precipice of a recession<\/a> earlier this month, Moody\u2019s Analytics chief economist Mark Zandi continued to add more granularity to his warning.<\/p>\n

In social media posts on Sunday<\/a>, he said his assessments of various datasets indicate that states accounting for nearly a third of U.S. GDP are already in a recession or at high risk of slipping into one. Another third is treading water, while the last third is still expanding.<\/p>\n

\u201cStates experiencing recessions are spread across the country, but the broader DC area stands out due to government job cuts,\u201d Zandi added. \u201cSouthern states are generally the strongest, but their growth is slowing. California and New York, which together account for over a fifth of U.S. GDP, are holding their own, and their stability is crucial for the national economy to avoid a downturn.\u201d<\/p>\n

For now, the\u00a0Atlanta Fed\u2019s GDP tracker<\/a>\u00a0points to continued nationwide growth, though it\u2019s expected to decelerate to 2.3% in the third quarter from 3% in the second quarter.<\/p>\n

Here\u2019s how the states\u2014and one federal district(*)\u2014break down:<\/p>\n

Recession\/high risk (22): 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*.<\/p>\n

Treading water (13): Missouri, Ohio, Hawaii, New Mexico, Alaska, New York, Vermont, Arkansas, California, Tennessee, Nevada, Colorado, Michigan.<\/p>\n

Expanding (16): South Carolina, Idaho, Texas, Oklahoma, North Carolina, Alabama, Kentucky, Florida, Nebraska, Indiana, Louisiana, North Dakota, Arizona, Pennsylvania, Utah, Wisconsin.<\/p>\n

Last week, Zandi also put a finer point on his forecast. He said Moody\u2019s machine-learning-based leading recession indicator put the odds of a downturn in the next 12 months at 49%<\/a>.<\/p>\n

While tax cuts and government spending on defense should help growth, that won\u2019t come until next year. The base case is that the economy avoids a recession, \u201cbut not by much,\u201d Zandi said.<\/p>\n

\u201cThe economy will be most vulnerable to recession toward the end of this year and early next year,\u201d he added. \u201cThat is when the inflation fallout of the higher tariffs and restrictive immigration policy will peak, weighing heavily on real household incomes and thus consumer spending.\u201d<\/p>\n

With the economy facing many threats, it wouldn\u2019t take much to push it into recession, Zandi said, singling out a selloff in the Treasury bond market that would send long-term yields soaring.\u00a0<\/p>\n

And before that, he pointed out that\u00a0more than half of industries are already shedding workers<\/a>, a\u00a0sign\u00a0that\u2019s accompanied past recessions.<\/p>\n

Payrolls expanded by just 73,000 last month<\/a>, well below forecasts for about 100,000. Meanwhile, May\u2019s tally was revised down from 144,000 to 19,000, and June\u2019s total was slashed from 147,000 to just 14,000, meaning the average gain over the past three months is now only 35,000.<\/p>\n

Because recent revisions have been consistently much lower, Zandi said he wouldn\u2019t be surprised if subsequent revisions show that employment is already declining.<\/p>\n

\u201cAlso telling is that employment is declining in many industries. In the past, if more than half the \u2248400 industries in the payroll survey were shedding jobs, we were in a recession,\u201d he explained. \u201cIn July, over 53% of industries were cutting jobs, and only health care was adding meaningfully to payrolls.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"After saying that the U.S. is on the precipice of a recession earlier this month, Moody\u2019s Analytics chief…\n","protected":false},"author":2,"featured_media":94200,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,1348,99,3355,164,3359,3353,44,3356,3354,3357,3358,1346],"class_list":["post-94199","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-breaking-news","tag-business","tag-daily-news","tag-economy","tag-global-news","tag-inkl","tag-news","tag-news-app","tag-news-headlines","tag-news-today","tag-today-news","tag-world-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/94199","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=94199"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/94199\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/94200"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=94199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=94199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=94199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}