DC,MD, and VA not doing well due to Trump layoffs.

Regional breakdown

On a regional level, at the sharpest end of the recession spectrum is the District of Columbia—to be expected, Zandi said, because of this year’s mass federal layoffs and funding cuts, which have now been exacerbated by a government shutdown. These issues are also dragging down the economies of nearby states like Maryland and Virginia.

Other regions tipping into the red have also likely done so because they are home to industries impacted by White House policy, said Zandi: “A bunch of other states rely on industries that are getting hit hard by the tariffs and even the restrictive immigration policy. They’re a manufacturing base, they’re agriculture, transportation, distribution, mining—those would be some of the Midwest states—even Georgia, which was the state that surprised me the most because historically that’s been a stronger state.

https://fortune.com/2025/10/09/america-feels-recession-state-dependent-income-cohort-moody-zandi/