Overview

• State-level analysis shared by Mark Zandi indicates states representing nearly a third of U.S. GDP are already in or at high risk of recession, with another third treading water.
• He says job growth has slowed to a virtual standstill and cautions that the first month of declining payroll employment would signal a serious downturn risk.
• Zandi expects the annual inflation rate to climb above 3 percent and approach 4 percent by next year, with price increases becoming more evident to consumers.
• Regional patterns are diverging, with Southern states generally still the strongest but losing momentum, and the broader Washington, D.C., area weakening due to government job cuts.
• California and New York, together accounting for over a fifth of national output, are holding steady and described as crucial to whether the country avoids a recession.