US Economy Is Balancing On a 3-Legged Stool, Says Moody’s Analyst

Mark Zandi, the Chief Economist at Moody’s Analytics, stressed that one-third of the US economy is already in a recession. He described that the American economy is currently balancing on a three-legged stool. He shared state-level economic data on X, indicating that 22 states in the US are at high risk of a recession.

Another 13 states in the US are on treading water, and if they don’t get back to safer territory, they will stand close to reaching the shores of a recession, he explained. The US economy could face significant headwinds if the trade wars and tariffs spiral out of control. “States making up nearly a third of US GDP are either in or at high risk of recession, another third are just holding steady, and the remaining third are growing,” said Zandi.

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Risk To the US Economy is Clear, Warns Moody’s Analyst

The risk is clear, he said, and described that if another leg breaks down, the US economy could fall. “The real question is where does your state fall on the map of winners and losers?” he said. However, he stressed that Southern states are generally doing well, but their growth is slowing. “Southern states are generally the strongest, but their growth is slowing. California and New York, which together account for over a fifth of US GDP, are holding their own. And their stability is crucial for the national economy to avoid a downturn,” he said.

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In addition, around 1.2 million immigrant labors have left the workforce, which could affect the US economy. They make up to one-fifth of the American workforce, according to Pew Research. Immigrants make up to 45% of the workforce in farming, 30% in construction, and 24% in service industries. The reasons behind the decline are deportation from ICE, while others fear stepping out to work in fear of deportation.