Heisenberg Report

Here Are The States At The Highest Risk Of Recession

Via LendingTree (abridged)

A Federal Reserve Bank of New York model puts the risk of recession at almost 40% over the next 12 months.

This — in addition to heightening trade tensions and growing market sentiment that the Fed will again cut rates at the end of 2019 — has amplified the chorus of news reports arguing that the economy is weakening. Despite this growing concern, it is difficult to determine when an economic downturn will hit — or how bad it will be.

Even though economics on the national level is directly tied to economics on the state level, the two do not always behave the same way.

We built a model to evaluate how at risk each state is for a recession. Specifically, our model estimates the likelihood that a state will have weak economic fundamentals, as determined by the growth rate of that state’s coincident index. State coincident indexes — created by the Federal Reserve Bank of Philadelphia — gauge how well a state economy is doing.

If a state has a negative year-over-year growth rate in its coincident index, it’s likely that that state has weak economic fundamentals. If a state has a negative year-over-year growth rate in its coincident index for two or more consecutive quarters, then we’ve considered it to likely be in recession.

Key findings

10 states with the highest risk for recession

No. 1: Michigan

No. 2: Hawaii

No. 3: Montana

No. 4: Maryland

No. 5: Louisiana

No. 6: Kansas

No. 7: Illinois

No. 8: Delaware

No. 9: Oklahoma

No. 10: South Carolina

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