Hi Susan.  Well, that doesn't look good!  Knockout roses are popular because they generally are free from disease and pests, but (as you are experiencing) that unfortunately is not a guarantee.

Here is an article from Extension about these roses--note in particular it's discussion of pests and diseases.  https://extension.umd.edu/resource/rose-rosenot-always-look-knockout-landscape-roses

From your picture I'm not sure what your problem is, it could be rose rosette disease (RRD), aphids, or rose slug--maybe all three.

To identify RRD, look for a tightly grouped, proliferation of distorted, usually bright red foliage (a witches'-broom).  Also, affected canes may be excessively thorny, thicker than unaffected canes and slow to mature. The canes can also be soft, as are the prickles, and will break off with little pressure. Unfortunately, there is no cure for RRD and you'll have to throw away the plant and its root ball in their entirety. 

Aphids and rose slugs can be treated with insecticidal soap.  Take a close look at your plant to see if you think the plant has aphids or slugs; if you think it does, try the soap.

Note also that knockouts need full sun.  If you can, move this plant to the sun or, if you need to get a replacement, install the replacement in full sun. 

Best of luck.

Bob