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Zandi Flags One-Third of U.S. Economy in or Near Recession as Risks Mount

Moody’s model pegs the 12‑month recession probability near 49%.

Overview

  • Zandi’s latest state map classifies 22 jurisdictions, including D.C., as in recession or high risk, 13 as treading water, and 16 as expanding.
  • He warns the broader Washington area is weakening after an estimated 22,100 federal job losses from January to May, based on Federal Reserve data.
  • Labor signals have deteriorated, with over 53% of industries shedding workers in July and national payroll growth reported at 73,000 with large downward revisions to May and June.
  • Nationwide output remains positive but slower, as the Atlanta Fed’s GDPNow tracker points to roughly 2.3% growth in the third quarter after 3% in the second.
  • Regional divergence persists, with southern states still leading though cooling, while California and New York are holding steady and seen as pivotal to averting a national downturn.