Banaian: Local Recession Could be on Horizon in St. Cloud

On January 7th it was announced that Macy's in Crossroads will be closing their doors in St. Cloud.  St. Cloud State Economist King Banaian joined me on WJON to discuss the economic impacts of that closing among other things.

Soft Economy

Banaian believes the Macy's closing is a sign the economy in the St. Cloud metro area is getting softer.  He says not encouraging data from the Minnesota Department of Employment and Economic Development is also contributing to his thoughts of the St. Cloud economy struggling.  Banaian believes there is a 40% chance St. Cloud will undergo a recession within the next 6-12 months.  He says losing 50-60 jobs from Macy's isn't a major impact but retail is one of the sectors locally that saw growth in 2025.

Recession?

Banaian explains healthcare and education are two sectors that the region traditionally saw economic growth but in 2025 that was not the case.  He says there were over 600 fewer jobs in that sector than we had the previous year.  Banaian has become less optimistic that the economy will just move along like it has and decline could happen within the next year.  He says often times a recession isn't identified until after he has occurred.

Hiring Slowed

Banaian says in a survey they did of St. Cloud area businesses, only 8% of them indicated they plan to hire additional workers in 2026.  He says that is a very small percentage.

ICE Impacts on Economy

Immigration enforcement in the state has taken the headlines in the last few weeks in Minnesota.  Banaian doesn't believe there are too many long lasting negative impacts of that on the St. Cloud economy.  He says some small businesses have closed at least temporarily.  Banaian indicates a bigger impact could come from individuals afraid to go to work that could cause offers to be negatively impacted.

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