A Local Economist Says St. Cloud May Already Be In A Recession

St. Cloud could be looking at a recession locally while the nation isn't in one.  St. Cloud State Economist King Banaian joined me on WJON to discuss the local economy.  He says the St. Cloud area is showing signs of a recession while it doesn't appear to be happening nationally.

Local Recession?

Banaian says the local recession is based on businesses on his latest survey indicating that they are pulling back on investing.  25% of responding businesses indicated their business was down, 15-20% expect to be down for the next 6 months.  Banaian says business leaders are naturally optimistic so when less than half of them feel their business will be down for the next 6 months, that is "pretty bad."  He says their survey of local business leaders were negative about the national economy despite measures indicating the national economy is pretty good.

Layoffs?

When the local economy isn't good, Banaian says there are layoff "sometimes" but not all the time.  He says 2-3 years ago many businesses couldn't find enough labor, many of them adjusted to use more automation which could include AI.  Many of those adjustments held as positions that weren't filled remain unfilled.

Gas Prices

Gas prices have been on the steady decline in recent weeks.  Banaian doesn't expect prices to drop much more without a clear indication that the war with Iran is over.  He says prices won't likely go back up unless the fighting intensifies.  He says gas prices may go up a bit today or tomorrow with a holiday weekend approaching.

Housing

Banaian says there is nothing alarming in regards to housing in the St. Cloud area.  He does suspect that those who were interested in moving awhile ago, but chose not to, may make the move as prices have stabilized a bit.  Banaian doesn't expect interest rates to change in the foreseeable future but if they were to change, they could go up to slow inflation.

If you'd like to listen to my conversation with King Banaian, click below.