Today’s encouraging headlines, 3.8% GDP growth and 4.3% unemployment, are clouding deep cracks beneath the economic surface. According to new research from Moody’s Analytics, the picture of broad-based prosperity doesn’t apply to all Americans. While national averages suggest strength, most states are struggling to stay afloat. The reality is that much of America is either in recession or teetering on the edge, putting your financial future at greater risk if the downturn continues to spread.
Moody’s Analytics reports that 22 states are now in recession (including DC), 13 are “treading water,” and only 16 are expanding. The overall growth rate of the U.S. is being propped up by a handful of powerhouse states like California, Texas, and New York. They contribute a massive share of national GDP. Without their momentum, the country’s growth numbers would likely look far weaker. Yet even within these states, their economic balance is fragile. And a small shock could push them into negative territory.
Some of America’s largest state economies are already slipping into contraction. Illinois, Georgia, Washington, New Jersey, Massachusetts, and Virginia are all major contributors to national output. Together, they represent more than 18% of the country’s GDP. But today they are listed as being in recession or at high risk of entering one.
