TUCSON, Ariz. (KGUN) — The economy’s hurting, and people are too. But will Arizona fall into an actual recession?
KGUN 9 has the prediction from a University of Arizona economist and a business that sees the ups and downs of other businesses.
The economy’s in a really strange place right now. The pandemic is still a factor. The job market is red hot. The Federal Reserve is trying to cut down inflation and they’re raising the interest rate to do it. So, what are the odds Arizona is going to fall into a recession? U of A economist George Hammond says, "about 50-50.”
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At FastSigns on Speedway, customers spell out confidence, or caution in their signs. Now hiring? Coming soon? Those are good signs.
Manager Steve Smith says, “We don't see a lot of going out of business. Huge flash sales at this point, which usually show up when things are slower.”
With bosses desperate for help, workers have a lot of leverage to pull in good wages. But University of Arizona economist George Hammond says inflation is eating up those fatter paychecks.
“We have, you know, the highest rates of inflation that we've seen in 40 years. So even though wages are rising rapidly, they're not keeping up with inflation.”
Hammond says Arizona is better off than a lot of other states but the odds of Arizona following the rest of the country into recession are about fifty-fifty.
“For the nation, I think we could easily see something like the downturns of the late 1970s and early 1980s, which were fairly severe downturns much worse than we saw in the early 2000s or the early 1990s. But those weren't nearly as severe as the great financial crisis of 2007 and 2009, or even the pandemic shock.”
Hammond says housing prices are declining for Tucson and Phoenix. They’re high, but still low enough to attract buyers from more expensive states like California.
He says job growth could drop for several quarters and says with interest rates going up, businesses that depend on people borrowing money to buy things will be more vulnerable than businesses that offer services.
If there is a recession, where do you want to work? Hammond suggests jobs in government, services, finance, and insurance may be good places to be.
Back at Fastsigns on Speedway, Steve Smith says he’s been printing more signs for business conventions—a sign businesses are starting to travel again.
He’s watching his expenses and watching customers predict their futures in their signs.
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Craig Smith is a reporter for KGUN 9. With more than 40 years of reporting in cities like Tampa, Houston and Austin, Craig has covered more than 40 Space Shuttle launches and covered historic hurricanes like Katrina, Ivan, Andrew and Hugo. Share your story ideas and important issues with Craig by emailing craig.smith@kgun9.com or by connecting on Facebook and Twitter.
