Would You Know if Your State Was in a Recession?

Even as the U.S. experiences the third-longest economic expansion on record, state-level slowdowns have emerged, raising tough-to-answer questions about recession risks across the country.

Recent state downturns have centered on areas that rely heavily on energy production, though other states also have flirted with weakening growth or even seen their economies shrink. Analysts do not perceive the germs of a crisis that might infect the nation, but signs of economic slippage outside the energy patches or into new industries could signal the potential start of the next national downturn. The last recession officially started in December 2007 and ended in June 2009, but its impact has lingered for years.

Natural disasters of the magnitude of Hurricanes Harvey and Irma do not indicate an imminent recession, although historically it can take years for regions to return to pre-storm economic conditions. Moody’s Analytics and S&P Global Ratings analysts said their initial view is that Harvey may cause a dip in productivity in Texas in coming months but the demographics and economic strength of the region are likely to mute the impact. “Certainly this is going to hurt, it creates a fair amount of disruption, but at the end of the day, I think Houston's economy will quickly find its way back, and the region's economy will quickly find its way back. This is not Katrina,” said Mark Zandi, chief economist at Moody’s Analytics.

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