According to a recent analysis, tariffs have been taking financial markets for an unpredictable journey, depreciating consumer and business confidence, and have kindled fears of an approaching recession. This has stimulated a sudden increase in imports as individuals attempt to avoid the tariffs, leading to negative economic growth for the first time since 2022.
While the U.S. economy may not officially be in a recession yet, two consecutive periods of negative economic growth are a typical indicator of a recession in progress. The non-profit research group, National Bureau of Economic Research, which is responsible for officially announcing U.S. recessions, only does so after a recession has already started, as it depends on retrospective data.
An alarming amount of Americans reside in states that are at risk of succumbing to a recession, and a significant number of states with the largest populations are classed as the least ready for an economic downturn, according to a report from National Business Capital released recently.
This evaluation employed economic information from each state to establish which one is in the optimum position to endure a recession. States that were identified as being better prepared for a recession usually possessed higher governmental reserves, GDP per capita, and safety net coverage along with having lower unemployment rates and lower property prices.
Southern and Mountain states are the ones proven to be least resistant to a recession. The report by National Business Capital stated that in recent years, these regions experienced an influx of immigrants and a real estate boom which subsequently inflated the cost of living and negatively impacted household budgets.
The state identified as being most susceptible to a recession was Louisiana. The state currently suffers from a higher unemployment rate than most other states, accompanied by having the weakest government reserves of all 50 states. Moreover, Louisiana offers some of the poorest safety-net coverage via programs such as unemployment insurance for its residents. Furthermore, the houses available in the state rank among the least affordable in the country.
The states of Colorado, Mississippi, and South Carolina are also notably under-prepared to combat a recession, as found by the study.
The study also revealed that the most resilient states are predominantly located in the northern Great Plains region, with North Dakota being ranked as the most resistant to a recession. This status is due to the state's relatively high GDP in comparison to population and government reserves, low unemployment rate, reasonably lower cost of living, and 'adequate' safety-net coverage, making it the most fortified state in the study.