(where I *do not* equate 2 consecutive quarters to a recession, as that’s what rookies do…):
Figure 1: Annualized GDP growth in 2025H1, calculated as log differences. Source: BEA and author’s calculations.
The states with negative growth are Arizona, Arkansas, Idaho, Maine, Maryland, Mississippi, Montana, Oregon, Vermont, West Virginia, and Wyoming, with Oregon hardest hit (-1.4% annualized). The US growth rate over this same period was 1.6%. These negative-growth rate states account for about 8% of total US GDP.
A quite different picture is shown using employment growth by state over the 6 month period up to June 2025, corresponding roughly to the period shown in Figure 1.
Figure 2: Nonfarm payroll employment growth in 2025H1, calculated as log differences. Source: BEA and author’s calculations.
Ten states have negative growth rates, but not the same. In 2025H1, the correlation between the 6 month change in employment and the quarter change in GDP is only 0.03.
Figure 3: 2025H1 GDP growth annualized vs. 2025H1 employment growth annualized. Nearest neighbor fit is tan line. Source: BEA, BLS and author’s calculations.
This poor mapping from employment to GDP growth at the cross section is consistent with the divergence in growth rates of GDP and employment in the aggregate.
Figure 4: GDP (black), GDPNow (gray +), NFP (blue), implied preliminary benchmark (green), early benchmark (red), civiian employment – research series (tan), all in logs 2024Q4=0. Q3 is July and August. Source: BEA, BLS, Atlanta Fed, Philadelphia Fed, and author’s calculations.
Note that both maps differ from Zandi’s recession map, shown here.
