https://www.axios.com/local/atlanta/2025/10/20/georgia-recession-forecast-economic-growth
Why it matters: The states in contraction are spread around the country – from Washington to Virginia to Maine – and make up about a third of overall GDP.
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Their problems are driven largely by a mix of slowing immigration, increasing tariffs and federal job cuts, Zandi argues.
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The analysis is based on Zandi’s calculation of where things stood in the economy at the end of August – perhaps more useful now, as more data measures go dark with the federal government shut down.
What they’re saying: Nationally, “my takeaway is not that the economy is in recession, but it’s pretty darn close,” Zandi tells Axios.
How it works: He created an index looking at state-level jobs data, as well as other inputs, including modeled industrial production, personal income and housing starts.
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The idea was to mimic what the eight-member National Bureau of Economic Research Business Cycle Dating Committee does when it determines if the economy is in a recession.
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While employment is the most important indicator, it is only one of many, Zandi tells Axios.
Zoom in: The states most impacted are the ones more reliant on agriculture and manufacturing, like the Peach State. Those sectors are more likely to be impacted by tariff increases, Zandi says.
- The immigration crackdown is suppressing growth as well. Georgia has been one of the country’s hot spots for ICE immigration arrests.
The other side: In a statement to Axios, a spokesperson for Gov. Brian Kemp said Georgia’s unemployment ranks below the national average.
- The state’s business climate and fiscal policies make Georgia “well-positioned to continue that positive momentum,” they said.
Between the lines: The states that received a negative index ranking landed in the recession bucket; the rest are either still expanding or “treading water.”
- For those categories, Zandi says he ultimately made some judgment calls after looking at more inputs, including credit card delinquency rates, credit scores, port activity and migration.
Flashback: In February, Georgia state economist Robert Buschman told state lawmakers that increased tariffs posed the greatest threat to Georgia’s economy. Exports make up 6% of the state’s gross domestic product, he said.
Reality check: Like NBER’s recession call, this is a subjective assessment. But in this case, it’s just one economist doing the ranking.
- Overall, the economy is not in a recession, and the national unemployment rate – at least in August – was still relatively low.
States doing well are ones still seeing robust population growth, particularly Texas and Florida.
What to watch: New York and California, both in the “treading water” category, could decide which way the national economy goes.
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