America’s 10 strongest state economies prepared for recession

With the U.S. economy solid but still facing elevated risk of recession — or, as President Trump described it in May, in a “transition period” — states are pitching themselves as the most stable place for companies to locate no matter what happens to the economy.

“Multiple international headquarters, hundreds of billions of committed investments across a variety of industries and the economy to handle it all,” the Indiana Economic Development Corporation promises. 

“Georgia job creation remains strong,” that state’s Department of Economic Development assures. “The State of Georgia is celebrating another year of sustained momentum for business recruitment and expansions.”

“Wisconsin is one of the most fiscally responsible states in the nation,” the state’s Economic Development Corporation says.

A CNBC analysis of all 50 state economic development websites finds that the economy — and factors relating to it such as job growth, foreign direct investment and the housing market — are the most frequently mentioned selling point this year. Economy popped up 222 times in our tally, well ahead of the next most mentioned factor, infrastructure, at 203. Under the methodology for CNBC’s annual business competitiveness study, America’s Top States for Business, that makes Economy the heaviest weighted category in 2025.

But measuring state economies is more challenging than usual this year. Sweeping federal budget cuts are threatening to throw sand in the gears of an economic engine in many states. And tariffs — so far, a wildly moving target — are already crimping the economies of states that depend on international commerce.

“If you don’t know what your product is going to cost, if you don’t know if your export market is going to be there in six months, if you don’t understand the terms that you’re trading on, it makes it really hard to say, ‘Okay, we’re gonna take a risk and invest in this new product line’,” said Dan Anthony, president of Trade Partnership Worldwide, a Washington, D.C.-based economic data firm.

To score each state’s economy in this year’s Top States for Business study, we considered traditional measures such as state gross domestic product growth, job growth, state fiscal health, the number of major corporations headquartered in each state, and the strength of the local housing market. But we also considered how dependent each state is on a shrinking federal government for spending and hiring. And we considered each state’s exposure to a trade war, using data compiled for us by Trade Partnership Worldwide.

“The big things that we start out looking at is just really exposure to international trade, and particularly the goods trades,” Anthony said.

In addition, the data looks specifically at states’ exposure to China, which is at the heart of the trade war.

Some states are particularly vulnerable should the economy take a turn for the worse. But these states have what it takes to navigate a recession.

10. South Carolina

While The Palmetto State is among the states most vulnerable to increased tariffs — international goods trade made up one-third of its GDP last year — South Carolina enters this unsettled period with one of the fastest growing economies in the nation, and some of the best job growth. Notably, that job growth is not occurring in the manufacturing sector, including the auto industry, where tariff increases could hit hard. Instead, the state’s biggest job growth is in construction, where employment rose more than 7% year-over-year in April, according to the U.S. Bureau of Labor Statistics. Federal revenue made up about 33% of the state budget last year, roughly in line with the national average.

2025 Economy Score: 274 out of 445 Points (Top States Grade: B-)

GDP (2024): $273.3 billion (+4.2%)

Job Growth (2024): +2.4%

Debt Rating and Outlook (Moody’s): AAA Stable

Share of state spending from federal funds: 33%

International Goods Trade (2024): $91.4 billion (33.4% of GDP)

Major Corporate Headquarters: None

9. Georgia

The Peach State’s diverse economy will come in handy should the national economy worsen. Seventeen companies in the Standard & Poor’s 500 are headquartered in Georgia, and while the home of the Port of Savannah is heavily dependent on international trade, there is plenty of other business to take up the slack in a slowdown. Georgia entered 2025 with solid economic growth, though job growth dropped off considerably. Hiring in most sectors, except…