‘We’re on the precipice’: Economist Mark Zandi warns recession odds are a coin flip in 2026 — 22 states already struggling. Protect your wallet now

According to Zandi, this is a sign that economic weakness may already be spreading at a regional level, noting that: “We’re on the precipice.”

He’s not alone. Economists across Wall Street and major forecasting firms are raising the odds of such a downturn. Goldman Sachs estimates a 30% chance and EY-Parthenon pegs it closer to 40%. That’s well above the typical baseline of around 15% to 20%.

Even before the war in Iran, economic data already showed signs of strain. The U.S. unexpectedly lost 92,000 jobs in February, defying expectations for job growth, while unemployment has crept up toward 4.5% — a notable increase from 3.4% just a few years ago.

Those kinds of shifts are often early warning signs of a broader slowdown.

In practice, a recession is typically defined as at least two consecutive quarters of declining gross domestic product (3). It often shows up in everyday life through slower hiring, fewer job opportunities and tighter household budgets.

And with new risks emerging, some economists believe the situation could escalate quickly. Here’s where those recession risks are already showing up:

The 22 states that Zandi says are in recession

Connecticut, Delaware, Georgia, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, New Hampshire, New Jersey, Oregon, Rhode Island, South Dakota, Virginia, Washington state, Washington, D.C., West Virginia and Wyoming.

Those are the states Zandi claims were in a recession as of October 2025.

In general, according to Zandi, any state that has an economy that centers on goods-producing activities, agriculture, light manufacturing or mining is not doing well at the moment.

He blamed much of the problem on President Donald Trump’s tariffs and federal job cuts.

Still, Zandi emphasized that the U.S. as a whole isn’t in a recession yet, but it may not be far off.

How to prepare for a recession

While there's no need to panic just yet, it's worth getting ahead of the risk.

Given that many states are experiencing an economic slowdown, it may only be a matter of time before other states feel the pain as well. If oil prices continue climbing, this could act as a tipping point, increasing costs for businesses and consumers alike and putting additional pressure on household budgets.

That's why it's important to prepare yourself financially. Here are a few things to focus on as you get started:

Emergency fund

In January, 2025, a U.S. News & World Report article revealed that 42% of Americans don’t have an emergency fund (4).

As a general rule of thumb, it’s a good idea to have at least three months’ worth of expenses in an emergency fund, though six months is what most advisors recommend.

For example, if your monthly expenses are $3,000, a three-month emergency fund means saving $9,000, and six months would mean $18,000.

If you haven’t started your emergency fund yet, you can get one started by setting up a budget to track your spending and free up some money carefully. Once you’ve freed up some extra cash, the next step is deciding where to keep it, ideally somewhere that earns interest while remaining accessible.

A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.

A Wealthfront Cash Account currently offers a base APY of 3.30% through program banks, and new clients can get an extra 0.75% boost during their first three months on up to $150,000 for a total variable APY of 4.05%. That’s ten times the national deposit savings rate, according to the FDIC’s March report.

Additionally, Wealthfront is offering new clients who enable direct deposit ($1,000/mo minimum) to their Cash Account and open and fund a new investment account an additional 0.25% APY increase with no expiration date or balance limit, meaning your APY could be as high as 4.30%.

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.

Pay off debt

Your next step in preparing for a recession should be paying off any high-interest debt you might have. The less money you owe, the better.

Paying off debt could also boost your credit score, making it easier to borrow money if you get laid off and need a loan to tide you over until you’re working again. According to Experian, the average U.S. credit score is 715 (5).

If yours is considerably lower, you might want to make an effort to pay your bills on time and reduce credit card balances as much as you can.

That said, if your debt feels hard to manage, consolidating it into a single loan with a single payment could be worth exploring.

Lending marketplaces like Upstart can match you with a personal loan offer in minutes.

Instead of relying solely on credit scores, Upstart’s AI-powered platform looks at various factors — including income, education, and employment - to give you offers — to give you offers that may be better suited for your individual situation.

Applying is fast and simple. Just submit a few personal and financial details and get an instant decision from Upstart’s AI-powered platform. Once approved, your loan is funded by a trusted bank or credit union partner, often as soon as the next business day.

How to protect your nest egg

Getting your debt under control is only one piece of the puzzle.

You may also want to consider how you’re protecting and growing your money by exploring alternative asset investments.

Stock markets tend to fall during a recession. It could be worth assessing other ways to grow your money, such as through real estate and art.

Getting started with real estate

These investments can also be easier than you may think. For instance, you don’t need to buy a property and deal with the headaches of being a landlord to make money from real estate.

You can tap into this market by investing in shares of vacation homes or rental properties through Arrived.

Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.

To get started, simply browse their selection of vetted properties, each chosen for its potential appreciation and income-generating potential. Once you choose a property, you can start investing with as little as $100, potentially earning monthly dividends.

Once you’re an investor with Arrived, you’ll gain access to their newly launched quarterly secondary market, where investors can buy and sell shares of individual rental and vacation rental properties directly on the platform.

This allows you to buy into properties you may have missed at the initial offering or sell shares before a property reaches the end of its hold period.

With access to more than 400 properties in 60 cities, this new way to trade real estate opens up flexibility and opportunities to gain access to more properties every quarter.

Even better, for a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.

Get into industrial rentals

But vacation rentals and single-family homes are just one part of the real estate vertical. If you want to fully diversify, there are other options out there — especially for investors with capital on hand.

After all, the price of real estate is often tied to the value of the land beneath.

If diversifying into multifamily and industrial rentals appeals to you, you could consider investing with Lightstone DIRECT, a new investing platform from the Lightstone Group, one of the largest private real estate companies in the country with over 25,000 multifamily units in its portfolio.

Since they eliminate intermediaries — brokers and crowdfunding middlemen — accredited investors with a minimum investment of $100,000 can gain direct access to institutional-quality multifamily opportunities. This streamlined model can help reduce fees while enhancing transparency and control.

And with Lightstone DIRECT, you invest in single-asset multifamily deals alongside Lightstone — a true partner — as Lightstone puts at least 20% of its own capital into every offering. All of Lightstone’s investment opportunities undergo a rigorous, multi-stage review before being approved by Lightstone’s Principals, including Founder David Lichtenstein.