Overview

• Moody’s Analytics says 21 states and the District of Columbia are already in recession, 13 are treading water, and 16 are expanding.
• The contracting states account for roughly a third of U.S. economic output even as recent national data show 3.8% GDP growth and about 4.3% unemployment.
• Weakness is concentrated in goods-producing and transport-linked sectors, and the DC area stands out due to federal job cuts, with higher tariffs and tighter immigration policy cited as pressures.
• Lower-income households report deteriorating finances and confidence during the government shutdown, with private surveys filling gaps left by missing federal data.
• Employment remains the key firewall as layoffs stay low, but Moody’s warns a downturn in California or New York could tip the nation into recession.