Map Shows States Most and Least Prepared for Recession

Newsweek

a day ago

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While a number of economic indicators show U.S. recession risks remain elevated, some states are more equipped than others to handle a potential downturn, based on their economic strength, diversity and independence.
According to Moody's Analytics, cited by British newspaper The Telegraph, the odds of the U.S. economy slipping into a recession within the next 12 months have grown to 47.6 percent, which is up significantly from 33.2 percent in January.
Amid these surge in risk, CNBC has charted which states could be best prepared—and least prepared—for a recession, basing the findings on overall economic strength and other characteristics that could insulate an economy from a major downturn.
Why It Matters
The elevated warning from Moody's comes amid a resurgence in tensions between America and a number of its main trading partners. Last week, President Donald Trump unveiled a host of new duties, and deadlines are now approaching for countries to secure deals before their tariff rates revert to the levels unveiled on April 2, or "Liberation Day."
In addition, the economy continues to show signs of weak consumer confidence, a sinking currency and a job market which, while holding steady, could lack stability.
Which States Are Prepared for a Recession?
For its rankings of the states best prepared for a recession, CNBC assessed those with large and diverse economies capable of absorbing economic shocks, attractive conditions for business, low debt and reliance on federal funding.
By this methodology, Florida stood out as the state best prepared for a recession in the near future. CNBC highlighted its strong economy—scoring 363 in out of a possible 445 in this category—as well as GDP growth, jobs growth, and the state's stable debt rating and outlook.
While still a "major player" in international trade, the outlet noted that this comprises only a relatively small part of Florida's wider economy, and that it is less reliant than others on trade with China, "leaving the state in a better position than many when it comes to tariffs."
Second on the list was Texas, the second biggest state economy by GDP and home to an increasing number of companies that have relocated away from California in search of a more business-friendly tax and regulatory environment.
The remainder of the states rounding out the top 10 are:
3. North Carolina
4. Delaware
5. New York
6. Washington
7. Idaho
8. Utah
9. Georgia
10. South Carolina
Which States Are Least Prepared for a Recession?
On the other end of the scale, CNBC identified Alaska as the state most vulnerable were a recession to occur.
This is primarily due to what the network said is a weak Alaska economy—scoring only 110 out of 445—thanks largely to a reliance on volatile oil prices. Per the Alaska Department of Revenue, the price of Alaska North Slope crude has dropped significantly over the past year.
Alaska is followed by Mississippi, where a heavy reliance on federal funding undermines overall economic strength, as the current administration has expressed desires to slash the federal budget.
The remaining states CNBC identified as especially at risk during a recession are:
3. Kansas
4. Louisiana
5. New Mexico
6. Rhode Island
7. Illinois
8. North Dakota
9. West Virginia
10. Oregon
What People Are Saying
CNBC, in its analysis of Florida, wrote: "Economic growth and job growth remain solidly in the top 10, state finances are strong, and the state is a leader in new business formations. Florida is a major player in international trade, but it comprises a relatively small percentage of the state's overall economy. And only a small percentage of that international trade is with China, leaving the state in a better position than many when it comes to tariffs."
Moody's Chief Economist Mark Zandi, quoted in The Telegraph, said: "The risk is high that there's a mistake or something else goes wrong when the economy is vulnerable and we actually go into recession."
What Happens Next?
A clearer sign on whether the U.S. is approaching a recession—conventionally defined as two successive quarters of economic contraction—will emerge in late July, when the Department of Commerce releases its advanced estimates of GDP growth for the second quarter. The first quarter saw GDP decline by 0.5 percent, the first drop in three years, though analysts are currently forecasting growth in the July 30 release.