According to a January report by Moody's Economy.com, 30 states still showed signs of economic expansion, 15 were at risk of sliding into recession, and five had already entered a downturn. The five states already in recession – Arizona, California, Florida, Michigan, and Nevada – represent about 25 percent of US gross domestic product (GDP), Mr. Zandi says. The 15 states at risk of recession represent another 25 percent of the GDP.
A softening economy fits into the portrait painted by the Federal Reserve Board's Beige Book, which takes a more anecdotal approach to business activity. On March 5, the Beige Book, which looks at the Fed's 12 districts, found economic growth had slowed since the beginning of 2008. "Two-thirds of the Districts cited softening or weakening in the pace of business activity, while the others referred to subdued, slow, or modest growth," stated the report.
But North Dakota, a farm state, has also worked hard to diversify its economic base, notes Gov. John Hoeven. "That's been our No. 1 focus," says Governor Hoeven in a phone interview.