SCSU’s Banaian; No Sign of a Recession Yet

It was a tough week on Wall Street last week and there have been numerous reports of job cuts.  St. Cloud State Economist King Banaian joined me on WJON.  He explains the recent troubles with the job market isn't a sign of a recession quite yet.  Banaian says the job market is weaker and slower but he's not ready to say a recession is coming.  The recent GDP report indicated a 2.8% growth rate for the 2nd quarter which Banaian says isn't bad but because standards have been so high since the pandemic, this feels low.  He doesn't expect a recession in the next 6 months but beyond that is difficult to say.

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Banaian indicates the number of people finding new jobs has gone down, but he says there hasn't been a big increase in layoffs yet.  The unemployment rate has gone from 3.5% nationally to 4.3% in the last 6 months, which can be a disturbing sign but Banaian says many people have entered the job market that hadn't been in the market before.  This has caused an increase to the unemployment rate.  He says if people are not looking for work they are not counted as part of the labor force.

Is spending going down nationally?  Banaian says an indicator of this can be credit card delinquencies.  He says this did not happen in the 2nd quarter which doesn't mean it couldn't happen in the 3rd quarter.  Banaian says there continues to be large amounts of people flying to destinations and restaurant reservation numbers are strong.  He says the visible economic indicators don't show a decrease in spending.

If you'd like to listen to my conversation with King Banaian, it is available below.