A Tennessee Tech Finance Professor said the national economy is dealing with a lot of uncertainty right now.
Dean of the College of Business Dr. Tom Payne said combining that concern about federal decisions with inflation makes things seem a bit shaky. Payne said inflation is currently at three percent and is a big reason your dollar is not going as far as it used to.
“Of course everybody feels that,” Payne said. “We feel it at the grocery store, we feel it when we are buying cars, when we are spending money on energy. I think everybody saw their bills this winter, and so we are just really feeling a lot of inflation.”
Payne said there are some clouds on the horizon that show a recession could happen in the next 12 to 18 months.
“It’s hard to put a number on that one,” Payne said. “It’s better to kind of say take a look at what is happening with employment. Employment tends to kind of coincide and sometimes kind of lags recessions. In other words, people don’t start getting laid off or having a hiring freeze until those things have already happened. The economy has already turned down a little bit, but I would watch that consumer confidence and consumer spending.”
Payne said inflation has gone down but is not meeting the target goal of two percent inflation the Federal Reserve has set. Payne said some indicators show a softening in demand as to why inflation has stayed high for as long as it has.
“Not quite as much demand out there, you know, manufacturing and all of that,” Payne said. “We are seeing some signs of that, and then in terms of the credit world, you know we are seeing a little bit of tightening in terms of credit.”
Payne said the Upper Cumberland’s economy is trending positively and that inflation may hit other areas across the nation harder than it does the Upper Cumberland. However, Payne said the Upper Cumberland could see a trickle effect.
“Employers, as the economy shows some signs of softening, then they may be a little more hesitant to, you know, invest that next dollar on plant equipment or hiring that next individual,” Payne said. “You know, so we may see folks kind of in a little bit of a holding area in some of these areas.”
Payne said the nation’s debt sits at $36 trillion. Payne said the nation has about $1 trillion in interest on the debt it owes. Payne said in his personal opinion cutting down the debt is a step in the right direction to get the economy back on track.
