SCSU’s Banaian; Gas Price Drop is a Sign of Something
Gas prices in the St. Cloud area and throughout the nation have been dropping for quite a few weeks now. St. Cloud State Dean, School of Public Affairs and Economic professor King Banaian joined me on WJON. He says the steady decline in gas prices is a sign of decreased demand but could also be a sign that we are already in a recession or will be soon. Banaian says some may think the drop in gas prices is great but he doesn't think so but it is a sign that there has been a destruction of demand for gas in this country and that people are tightening their belts which is a sign we are headed for a recession.
Banaian explains that this is a "weird" recession as recessions go because rising employment is usually apart of a recession and we don't have that. He says unemployment is a lagging indicator. Banaian says some people may still have a lot of savings from the COVID federal dollars from 2020 and 2021. Because of this he feels people will likely spend a typical amount of money on Christmas and will also look to travel someplace warm over the winter. Banaian expects demand to be high for travel over the next few months which is leading to higher airline prices. He also expects hotel costs to go up. Banaian does say indications are people are being very careful with their Christmas shopping this year looking for deals more than ever.
The State of Minnesota has a $17 Billion dollar budget surplus. Governor Walz and the legislature is considering refund checks for Minnesotans. Banaian says if we are headed into a recession that type of thing can really help.
If you'd like to listen to my conversation with King Banaian it is available below.