America’s vaunted economic resurgence under US President Donald Trump appears to be fragmenting, as an alarming 23 states, according to Moody’s Analytics chief economist Mark Zandi, are now in or near recession.
Drawing on state-level data, Zandi warns that what once seemed like a nationwide boom is now a patchwork of contraction and stagnation. His analysis shows that almost one-third of US gross domestic product (GDP) originates from states identified as either contracting sharply or teetering on the brink.
A Fractured Recovery
Zandi’s latest assessment, shared on social media and in interviews, divides the 50 US states (plus Washington, D.C.) into three categories: recession/high risk, treading water, and expanding. According to his numbers, 23 states fall into the first category, signalling serious regional weakening.
Among the hardest hit are states heavily dependent on manufacturing, agriculture, light industry, and mining. Zandi points to Connecticut, Illinois, Iowa, Kansas, Maryland, Massachusetts, Mississippi, Montana, New Hampshire, New Jersey, Oregon, Rhode Island, South Dakota, Virginia, Washington, West Virginia, Wyoming, Georgia, Maine, and Minnesota, plus Washington, D.C.
Meanwhile, huge economic engines such as California (14.5%of U.S. GDP) and New York (7.9%) are only ‘treading water’, neither shrinking nor growing strongly. Zandi insists their stability is ‘crucial’ for averting a full-blown national downturn.
From ‘Make America Great Again’ to Fraying Foundations
The contrast is striking. The Trump-era mantra ‘Make America Great Again’ conjured images of booming growth, surging job creation, and revitalised factories. Yet Zandi argues that many of the policies that defined that era, tariffs, aggressive trade posture, cuts in federal employment, are now dragging heavily on state-level economies.
Zandi posted on social media that ‘the tariffs are cutting increasingly deeply into the profits of American companies and the purchasing power of American households’. He also criticised restrictive immigration policies for reducing the labour pool and slowing economic momentum.
It’s no mystery why the economy is struggling; blame increasing U.S. tariffs and highly restrictive immigration policy. The tariffs are cutting increasingly deeply into the profits of American companies and the purchasing power of American households. Fewer immigrant workers…
— Mark Zandi (@Markzandi) August 3, 2025
He described the US economy as ‘on the precipice of recession’, echoing a powerful warning that Trump’s economic legacy may be crumbling beneath the surface.
Strain Behind the Numbers
The pain is not just statistical. In interview footage, Zandi fears that job losses will deepen, especially in sectors already feeling the strain. Payroll growth has nearly stalled, he said, even before all data revisions are in.
Zandi singled out the Washington, D.C., region for particular concern, noting that mass federal downsizing is ripping through its economy. In Maryland alone, more than 15,000 federal jobs have already disappeared in 2025.
In agriculture-dependent states, falling commodity prices and volatile farm incomes amplify the pain. Meanwhile, in manufacturing hubs, shrinking exports and supply-chain stress are squeezing growth even further.
Zandi’s commentary carries a deep human dimension, ‘hanging on by their fingertips’, he said, referring especially to lower- and middle-income households burdened by debt and shrinking wages.
The Nationwide Risk: Big States Hold the Balance
It is no accident that Zandi highlights California and New York. These behemoths of the US economy are stabilising forces; if either slips into contraction, the national outlook darkens sharply.
He warned that de-globalisation, the trade war, and tight immigration are pushing these states downward, while artificial intelligence investment acts as a fragile counterbalance. But even that tailwind may not be enough if macroeconomic fundamentals continue to deteriorate.
To many Americans, the national statistics, a surprisingly robust 3.8 per cent GDP growth and 4.3 per cent unemployment, feel misleading. Zandi suggests that those numbers mask a more ominous truth, that millions are living in local recessions even as headline figures remain superficially healthy.
His warning is clear: a national recession may already be brewing at the state level.
America once promised a grand comeback under Trump’s economic agenda. Now, that promise risks unraveling, not because of foreign crises or external shocks, but from fissures within. The map of pain is growing, and with 23 states reeling, the question haunts: Is America great again?
Originally published on IBTimes UK
