Moody's Chief Economist Mark Zandi's latest assessment reveals a striking economic reality: roughly half of U.S. states are either in recession or nearing one. But here's what really caught my attention—the remarkable dispersion in GDP growth rates across states.
We tend to think of recessions in binary terms: the country is either in one or it isn't. The data tells a more nuanced story.
The current landscape:
States like Texas, Florida, and North Carolina are thriving California and Michigan (among others) are holding steady but vulnerable Still others including Illinois, New Jersey, and Washington are struggling significantly
This dispersion highlights something we often overlook: America is vast, and economic conditions across states are less correlated than conventional wisdom suggests. The variations likely extend even further when you look within states themselves.
The policy challenge: This raises a critical question—how do you design effective one-size-fits-all monetary policy when different regions are experiencing vastly different economic realities? The Fed's tools impact a booming Texas the same way they impact a struggling Illinois.
It's a reminder that understanding the economy requires looking beyond national averages to see what's really happening on the ground.