SALT LAKE CITY — Housing, food prices, gasoline, you name it, prices are at an all-time high and the soaring inflation has many concerned about an impending recession.
Local Utah economy experts say their outlook on the future isn’t so bleak, but there are things you can do now to help yourself and your wallet.
“It’s kind of a tough situation right now, the economy is doing well but people don’t feel like the economy is doing well and that’s really that impact of inflation,” said Robert Spendlove, senior economist at Zions Bank.
Spendlove added that a recession red flag can be a contracting economy, something the country just experienced.
“A recession is not inevitable right now. There are some signs the economy is slowing, one of the things we did see is the national GDP contracted,” said Spendlove.
But there are good indicators right now as well according to Phil Dean, a chief economist with the Kem C. Gardner Policy Institute.
“At the same time household balance sheets are very strong, the strongest they’ve been in many generations, along with the bad news there’s good news out there and that’s why I am not confident that 100 percent there’s going to be a recession,” said Dean.
Spendlove adds he’s most curious to see what the Federal Reserve will do now, believing they should have started to raise interest rates about a year ago when inflation started.
“A lot of the situation that we’re in right now was created by all the money coming into the economy, whether it was the CARES Act or the unemployment benefits, or the direct payments to families,” said Spendlove.
Dean echoes that sentiment, stating the federal government sent pandemic money to many households that didn’t need it.
“Sent that money out where the lack of spending wasn’t a lack of desire to spend, or lack of demand, it was fundamentally a supply issue… not a demand issue,” Dean explained.
Spendlove says with increasing interest rates, the goal is to slow down the economy.
“So, what’s really important for people to do? Pay off that high interest debt, try to get out of some of those revolving credit cards or things like that,” said Spendlove.
Spendlove also said people should have an emergency fund of 3-6 months worth of savings, or if that’s too much, he says at least have $1,000 saved for expenses
“Certainly, it’s a time to prioritize spending, figure out what the ‘have to haves’ are," explained Spendlove. "There’s also a labor shortage, so it’s a good time to negotiate wage increases to help offset at least some of the increases in inflation we’re seeing."
Spendlove added the country has a greater chance of a recession in 2023 because it takes time for the federal interest rate increases to have an impact.
IN-DEPTH — How Utahns, Americans are spending their money: