BATON ROUGE, La. (BRPROUD) — People in the Capital Area are still feeling the effects of inflation even as the price of gas goes down.
“It’s a mixed bag because the price of energy and, namely gasoline, has gone down, but the price of other goods has gone up,” said Baton Rouge Area Chamber Business Intelligence Senior Director Andrew Fitzgerald.
He said this mixed bag is causing inflation to sit at a standstill.
“Our paycheck might be five to 10% more than it was last year with five or 6% higher. That’s a great raise, but inflation is 8%. It’s more than gobbled up your entire raise,” he explained.
Those items, along with several other factors, shifted the economy into an unusual state.
“There’s a big debate over whether it’s a recession or not. Historically, if there are two quarters of negative growth that are real, we’ve just kind of said that’s a recession. But now it’s more nuanced because in a recession you normally don’t see a half million new jobs in a month,” said Fitzgerald.
“We’ve got too much money out there,” said former LSU professor and economist Loren Scott.
Scott is on one side of the fence. He believes we’re not in a recession yet, but one could soon be on its way after money was pumped through the system during the pandemic while the supply chain tried to keep up.
“What the Federal Reserve would really like to do to slow down the economy is withdraw enough money out so they can reduce inflation, but not cause the economy to go into recession,” Scott explained.
“If everyone’s buying things and there’s the same number of goods and services, then that becomes a scarcity of it,” said Fitzgerald.
Economic experts said the Federal Reserve is also raising interest rates to slow spending.
“When they buy cars, when they buy furniture and appliances, any durable goods that they buy, there’s going to be a tendency for them to cut way back on that,” said Scott.
Scott predicted that in 2023 the nation will hit a downturn and there will be a recession, but he also believes that the Baton Rouge area won’t be hit as hard.
“Now, the other side of the coin is when the national economy comes out of it, and we start to recover. We recover. You know, we don’t fluctuate near as badly as the national economy does when we go in and out of recessions,” Scott stated.
Economists also said we’ve gotten back around 60 to 70% of the jobs in Louisiana that were lost during the pandemic, but it’s still a long way from being fully recovered.