U.S. economy may be one shock away from recession — and California and New York could decide its fate. Moody’s chief economist Mark Zandi warns that nearly one-third of the U.S. economy is already in or near recession, with both states now “treading water.” California drives 14.5% of U.S. GDP, while New York adds 8%, making their slowdown critical. Job growth has stalled, tariffs are hurting automakers, and inflation is edging higher. The Atlanta Fed still sees 3.9% Q3 growth, but economists say a sharp Q4 slowdown looms. “We’re going into a very difficult holiday season,” warns KPMG’s Diane Swonk.
