Frank Nez 
On August 25, 2025, Moody’s Analytics chief economist Mark Zandi issued a stark warning that nearly one-third of the U.S. economy is either in recession or at high risk of slipping into one, driven by President Donald Trump’s aggressive tariff policies and restrictive immigration measures.
According to a Fortune report, 17 states, representing 29% of the nation’s GDP, are stagnating or contracting, while only 10 states, accounting for 26% of GDP, show robust growth.
This uncertain economic landscape, coupled with flat consumer spending, declining manufacturing, and rising inflation, has heightened fears of a serious economic downturn, challenging the Trump administration’s claims of a thriving economy despite the data.
What’s Happening Within States?
Zandi’s analysis categorizes states into three groups based on economic performance: expanding, at risk, or in recession.
The 17 at-risk or recessionary states include major economies like California, New York, and Illinois, which together contribute significantly to national GDP.
California, despite its tech-heavy economy, faces challenges from reduced consumer spending and high interest rates.
In contrast, states like Texas, Florida, and Georgia, representing 26% of GDP, are actually expanding, driven by strong labor markets and consumer activity, per Fortune.
The remaining 24 states, including smaller economies like Iowa and Montana, are classified as “in between,” showing neither significant growth nor contraction.
The report highlights that Trump’s 10% across-the-board tariffs, with rates as high as 50% on imports from China, India, and the European Union, are squeezing corporate profits and consumer purchasing power.
Zandi noted, “The economy is on the precipice of recession,” pointing to weak job growth, with July 2025 payrolls increasing by just 73,000—far below the expected 100,000—and downward revisions slashing May and June job gains by 258,000, according to The Economic Times.
What Are Key Economic Indicators Signaling Trouble?
The Consumer Price Index rose above 4.2% in Q1 2025, signaling persistent inflation despite a 2023 peak of 9.1%, per Forbes.
Core inflation, excluding food and energy, hit 2.8%, limiting the Federal Reserve’s ability to cut interest rates from the current 4.34%, per U.S. News.
The yield curve, inverted since June 2022, is the longest such inversion in modern history, a reliable recession predictor in 94% of cases since 1955.
Manufacturing is contracting, with the Institute for Supply Management’s July index signaling decline, and construction, particularly single-family home spending, is also falling.
The foreign-born workforce has dropped by 1.2 million in six months due to Trump’s aggressive immigration crackdown, reducing labor participation and economic output, per the Economic Times.
Consumer spending, which drives 70% of the economy, has flatlined, contributing only 0.4 percentage points to Q1 GDP growth of 1.1%.
Here’s What The Experts & Public Are Saying
On X, users like @BizToc highlighted Zandi’s warning, noting that “nearly one-third of the U.S. economy is either already in recession or at high risk,” amplifying public concern.
Trump’s Commerce Secretary Howard Lutnick dismissed recession fears on NBC’s Meet the Press, stating, “There’s going to be no recession in America,” and defending tariffs as a boost to U.S. wealth, per Firstpost.
However, economists like Steve Hanke, a former Reagan adviser, warned of an 80-90% recession probability, citing a stagnant money supply, per Newsweek.
Critics, including Sen. Alex Padilla, have linked Trump’s policies to economic distress, with Padilla noting ICE raids’ “cruel” impact on communities.
Conversely, MAGA supporters like @WarClandestine praised Trump’s aggressive policies, arguing they prioritize American jobs.
However, Americans argue no one wants to take over the jobs of these immigrants, which are often labor intensive with lower pay.
Also Read: Pro Trump Farmers Now Admit They Can’t Find American Workers
A Pew Research Center poll showed 62% disapproval of Trump’s immigration handling, with 54% opposing aggressive ICE raids, as earlier reported by FrankNez Media.
What Will The Trump Administration Do Next?
With Trump’s approval rating at 39% per an ABC News/Washington Post/Ipsos poll, the economic warning signs threaten his political capital.
His tariff policies, while aimed at boosting domestic manufacturing, have led to retaliatory tariffs from China and others, raising costs for U.S. consumers, per the latest data.
The Atlanta Federal Reserve’s projection of a 2.4% GDP contraction in Q1 2025 also contrasts with the New York Fed’s optimism for growth, highlighting uncertainty.
Economic pressures, including a record $18.39 trillion in household debt and a commercial real estate sector facing $1.2 trillion in refinancing challenges, add to the risks, according to Forbes.
As the 2026 midterms approach, Trump’s ability to navigate these challenges—while managing other controversies like his D.C. death penalty push and media attacks—will shape his administration’s trajectory.
But I’m curious to know what you think, leave your thoughts and vote reaction below.
Also Read: ICE is Now Recruiting Teens and Seniors in ‘Desperate Attempt’
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