Overview

• Moody’s state index finds roughly 21–22 states contracting and about 13 treading water, with the shrinking economies accounting for around one‑third of U.S. output.
• The weakness clusters in goods production and transportation, while the D.C. area stands out due to federal job cuts and policy shifts including higher tariffs and tighter immigration.
• National gauges remain sturdy, with recent GDP growth near 3.8% and unemployment around 4.3%, keeping layoffs low for now.
• Mark Zandi says lower‑income households are financially stretched, and private surveys show deteriorating confidence, particularly for earners under roughly $35,000.
• U.S. hiring plans have fallen to their lowest level since 2009, and Zandi cautions that a downturn in California or New York could tip the nation into recession.