St. Cloud Economist Warns Of Regional Recession Despite Low Unemployment

St. Cloud State Economist King Banaian believes the St. Cloud metro area has been undergoing a recession while the rest of the nation has not.  He says hiring has slowed down locally but firings or layoffs have not been widespread.

Central MN Recession

Banaian explained that the St. Cloud Metro area has 650 less jobs according to their quarterly business report.  He doesn't expect a job turnaround in the 4th quarter of 2026 but he does expect it to turnaround in the first quarter of 2027.  Banaian believes we fell into a recession locally due to lower growth of the labor force.  He says it's possible to be in a recession when the unemployment is low, which it is right now.  Banaian says we've had a lot of baby boomers retiring and not enough new workers to fill those positions.

Traditional Busy Months for Retail

Banaian says October and November are two of the busiest months for retail.  He says about 40% of the consumption in the United States takes place over the 2 months of October and November.  Banaian says in 16% of the months we see 40% of the consumption.  He is concerned that we'll see a need for less retail seasonal help than what Central Minnesota normally does.

Unemployment Rate Still Low

Banaian explained that unemployment insurance claims are still low in Central Minnesota and nationally.  He says the economy is largely a "no hire, no fire economy".

Example of Signs Pulling Out of a Recession

Signs of pulling out of a recession include the following according to Banaian; Increased construction on the commercial side, new businesses coming into the community, and/or expansion of jobs at an existing large employer.

Why Gas Prices Are Declining

Gas prices have slowly declined over the past few weeks.  Banaian says the nation has found access to additional oil which has slowly reduced gas prices.  He believes if the war with Iran picks up again, prices will go back up.  Banaian says if the war doesn't resume after the election, prices will continue to slowly decline.

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