Economic Warning: Which States Face Recession Risks in 2024?

When asking “is there a recession” affecting specific regions, data from Moody’s Analytics provides crucial insights. While the U.S. economy hasn’t officially entered a recession at the national level, a troubling pattern has emerged at the state level — approximately one-third of U.S. GDP-producing states are either experiencing recession conditions or sitting precariously close to one.

The Fragmented Economic Landscape

Mark Zandi, Moody’s Analytics’ chief economist, has highlighted a critical reality: the recession threat isn’t evenly distributed. Rather, economic vulnerability is scattered across diverse regions, creating a patchwork of struggling and stable markets. According to Zandi’s assessment, states collectively representing nearly a third of national GDP are grappling with recessionary pressures. Simultaneously, another third maintain stability, while the final third shows warning signs of slowing momentum.

The interconnected nature of America’s economy means that weakness in key states ripples outward. Take the Washington D.C. metropolitan area, which faces distinct challenges from federal government workforce reductions. Meanwhile, Southern states generally maintain stronger economic footing, though their growth trajectories are decelerating. California and New York — together generating over 20% of U.S. GDP — remain relatively resilient, but their performance is absolutely vital to preventing a broader national downturn.

Which 22 States Are Most Vulnerable?

Moody’s analysis identified 22 states facing significant recession pressure. These regions, ranked by economic resilience (from strongest to weakest), include:

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

Despite ranking from strongest to weakest, all 22 face mounting economic pressure and elevated recession risk indicators.

Why This Matters for the National Economy

The collective economic health of these 22 states represents an enormous share of total U.S. GDP. If recession conditions deepen across these regions simultaneously, the nation could transition from regional weakness into full-scale economic contraction. The question “is there a recession” becomes less theoretical when a third of economic output is already showing strain.

Zandi emphasizes that regional economic data reveals what broader statistics might obscure — specific vulnerabilities that could trigger a national recession. State-level contraction signals often precede nationwide slowdowns, making this data particularly predictive of future economic direction.