Origin and usage of "a shambles"

"in a shambles" or "a shambles" would be correct. The only form that the last one would work for is "shambolic".

Given the origin, it actually does make sense, because the object is in [or just is ] a place of chaos and disorder - one of many such places. But it seems that an economy should be a shamble. The s is not a pluralisation, but a part of the word.

In York, UK, The Shambles is still a street, and a popular one for tourist shops.

The weird usage seems to have developed in the same way as "a headquarters". Consider the following Ngram:

The original phrase seems to have been "shambles" or "the shambles", almost always plural. It meant "a place for slaughtering animals", but later came to be also used for scenes of carnage, scenes of great disorder, and certain dangerous shoals at sea.

Etymonline says that "shambles" originally meant "meat market", having evolved from the word schamil meaning "table or stall for vending". I assume that it naturally started out as a plural, because there would be several butcher's stalls at a meat market.

However, once "shambles" came to mean "a scene of great disorder or carnage", the things it referred to were more naturally singular, and so "shambles" slowly came to be used as a singular.

Merriam Webster says:

shambles: a place of mass slaughter or bloodshed; a scene or a state of great disorder or confusion

and offers an example:

the city was a shambles after the bombing

note that it doesn't use 'in' at all.

Traditional usage would say your first option is incorrect. Given the definition above we can elaborate your sentence as:

The country's economy is (figuratively) 'a place of mass slaughter' or 'a scene of great disorder' thus, The country's economy is a shambles would be optimal, I think.

Perhaps using the state of disorder definition would allow one to use 'in a ~'

So, your second option, "The country's economy is in a shambles" could also work.

As long as we're throwing Ngrams in, here is one that shows that Option 1 has gained popularity quite recently:

I have understood that the term goes back to Biblical times, and indicated the meat market where meat from the pagan temples and the Jewish Temple was offered for sale. Apparently the priests received more in meat offerings than they could ingest, and sent the excess to the shambles for sale to the general public. If originally offered to idols, the meat may have brought a higher price that the same cuts from local producers.

H Craft Houston