Moody's Economist Warns: 23 US States Sliding into Recession as National Economy Teeters

As of November 16, 2025, a stark warning has emerged from Moody's Analytics chief economist Mark Zandi: nearly half of all US states are sliding into recession, posing a significant threat to the national economy's ability to stay afloat.

Zandi's grim assessment comes after major corporations slashed over 150,000 jobs last month, the biggest October total in more than two decades. Sticky inflation, dwindling home construction, factory layoffs, and flat-lining wages have all contributed to the bleak economic picture.

According to Zandi's analysis, 23 states are already in recession or at risk, while only 16 are firmly growing. These struggling states account for 31.8% of the US's overall GDP, and the trend is expanding. The fate of the national economy now appears to rest on the performance of the two largest state economies, California and New York, which have plateaued but are not yet in recession.

However, there has been one bright spot: the growth of AI has provided a boost to economic activity, keeping Wall Street trading near record highs and inspiring major data center construction and spending projects. But this optimism has recently been tempered by concerns from investors like Michael Burry and Masayoshi Son, who have made bets against the technology's risky ventures.

If AI falters as an economic engine and California and New York fail to find their footing, the domino effect could tip the national economy into the recession it has been teetering toward, Zandi warned.