U.S. Recession Risk Deepens: 22 States Already in or Near Economic Downturn

Recent economic data reveals a troubling picture across America: nearly a third of the nation is experiencing contraction or dangerously close to it. While the United States as a whole hasn’t officially entered recession territory, significant portions of the country are already sliding into economic decline, creating a fragmented national landscape where prosperity and struggle coexist by geography.

Mark Zandi, chief economist at Moody’s Analytics, highlighted this critical divergence in a recent analysis. “State-level economic indicators make clear that the U.S. is teetering on the edge of broader recession,” Zandi noted, explaining that current data shows a stark division: roughly 30% of U.S. GDP comes from states either in recession or facing high recession risk, another third is merely stagnating, and only the remaining portion shows meaningful growth momentum.

The Geographic Divide of America’s Recession Risk

The recession isn’t uniformly distributed—it’s concentrated in specific regions, each with distinct vulnerabilities. This geographic fragmentation explains why national statistics mask deeper troubles brewing across the country.

The D.C. area stands out as a particular weak point, suffering from substantial federal workforce reductions that have cascading effects through local economies. Meanwhile, Southern states have maintained relatively stronger positions compared to other regions, though their growth trajectories are noticeably decelerating. Two economic powerhouses—California and New York—together accounting for over 21% of total U.S. GDP, are currently maintaining their footing, but their stability remains critical to preventing a full national recession.

Zandi’s analysis demonstrates that recession risk has become interconnected across state borders, spreading like a contagion as weakened regional economies pull down their neighbors. Areas that were previously growing have shifted into contraction, while others that managed to avoid major decline are now in holding patterns rather than advancing.

Which States Face the Greatest Economic Pressure

These 22 states represent the frontline of America’s recession battle. Ranked from relatively strongest to most vulnerable economies, all face significant headwinds:

1. Wyoming
2. Montana
3. Minnesota
4. Mississippi
5. Kansas
6. Massachusetts
7. Washington
8. Georgia
9. New Hampshire
10. Maryland
11. Rhode Island
12. Illinois
13. Delaware
14. Virginia
15. Oregon
16. Connecticut
17. South Dakota
18. New Jersey
19. Maine
20. Iowa
21. West Virginia
22. District of Columbia

Even the states ranked highest on this list operate under structural economic constraints that distinguish them from healthier economies elsewhere. The inclusion of major industrial and tech hubs signals that no region—regardless of historical strength—is immune to current pressures.

Why Regional Recession Matters for the U.S. Economy

The concentration of recession risk in these 22 states takes on heightened significance when considering their collective economic footprint. Together, they represent a substantial portion of the nation’s total economic output, making their trajectory pivotal for whether the entire country slides into full-scale recession or manages to stabilize.

The interconnected nature of modern economies means that state-level contractions don’t remain isolated. Supply chain disruptions, reduced consumer spending, and labor market deterioration ripple across state boundaries, amplifying recessionary pressures. If these vulnerable states tip further into contraction, they could trigger the cascade that pulls the broader U.S. economy into an officially declared recession.

Understanding this state-level granularity reveals why macroeconomic trends appear divergent. The U.S. recession risk isn’t a simple national story—it’s a complex story of 50 economies operating on different trajectories, with roughly one-third already showing severe strain or decline.