Local Economist Weighs In On Inflation And Property Taxes

Inflation, and an increase in property taxes are conditions that Central Minnesotans are faced with.  St. Cloud State Economist King Banaian joined me on WJON to examine how inflation, property taxes, consumer spending and jobs are impacting the local economy.

Rent Going Up?

Banaian believes renters may not see their rent go up in the St. Cloud area due to property tax increases.  He says there is competition for renters and land owners would rather incur the 10% property tax increase than lose a good renter.  Banaian indicates there is a trend both nationally and locally with an increase in apartment vacancies.

The Bad News

Banaian says the bad news is many of the tariffs haven't made a full impact on the consumer, but it will soon.  He explains the inventory of goods that was built up prior to the tariffs by many businesses is running low.  Banaian believes many of the goods we'll start seeing on store shelves are goods that faced a tariff and prices could be going up.

Interest Rates

Banaian says Federal Reserve Chair Jay Powell may have tipped his hand recently at a speech in Wyoming, that they are thinking of reducing interest rates.  Banaian indicates that will keep inflation high at 3% instead of dropping to 2%.  He says the effect of tariffs is to raises prices but it hasn't happened yet.  If that were to happen interest rates may not be reduced after all.

Labor Market

The labor market is undergoing some unusual changes.  Banaian says we are seeing a decrease in the available labor market and businesses are decreasing their ability to hire and to invest.  In short we are seeing less workers and less jobs available.  Banaian believes we have less labor available due to the Federal policy on immigration while the economy had led to less hiring and investing by businesses.

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