22 states are in recession or close to it. How Mass. stacks up
Nearly two dozen states across the nation are either in a recession or teetering on the brink. And that includes the Bay State, which has been hit by some $3.7 billion in funding cuts by the federal government.
Three factors — slowing immigration, tariffs, and federal job cuts — are driving the contraction, which has hit states across the country, the analysis by Mark Zandy, the chief economist at Moody Analytics, concluded.
It was first reported by Axios .
The states that are in recession, or are at high risk, account for about a third of the nation’s gross domestic product, according to Zandy’s analysis. Another third are holding steady, while the remaining third are growing.
The Bay State, which accounts for 2.73% of the nation’s GDP, was listed as “high risk” or already in recession in Zandy’s analysis. The same held true for Connecticut, New Hampshire and Rhode Island.
Neighboring New York and Vermont were listed as “treading water.”
“The broader DC area stands out due to government job cuts,” Zandy wrote in a post to X . “Southern states are generally the strongest, but their growth is slowing. California and New York, which together account for over a fifth of U.S. GDP, are holding their own, and their stability is crucial for the national economy to avoid a downturn.”
The Bay State has been buffeted by shifting economic winds in the nearly nine months since the start of President Donald Trump’s second administration.
The state’s $60 billion budget for the fiscal year that started July 1 on about $16 billion in federal support .
The $3.7 billion the state has lost so far includes a mix of Trump White House clawbacks and cuts included in the domestic policy mega-bill that the Republican president signed into law earlier this year.
“Donald Trump and Congressional Republicans’ funding cuts are making life more expensive for Massachusetts residents, undermining public safety, taking away health care, and hurting our businesses,” Gov. Maura Healey said in a statement accompanying the latest data drop.
Given that, budget writers on Beacon Hill have been carefully monitoring the state’s tax collections.
The state collected nearly $4.6 billion in taxes in September, that’s $133 million or 3% more than actual collections in September 2024. But it’s still $64 million or 1.4% behind the state’s benchmarks, according to state Department of Revenue data.
Year-to-date collections clocked in at a shade over $10 billion. That was $309 million or 3.2% more than actual collections at the same time last year. But it was $64 million or 0.6% below the year-to-date benchmark, state data show.
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