PORTLAND, Ore. (KOIN) – When it comes to the United States economy, one financial expert says there’s some good news and bad news as Oregon reaches a historically low unemployment rate while inflation hits day-to-day consumer expenses.
According to the Oregon Employment Department, the state’s unemployment rate dropped to 3.4% in July from 3.5% in June. The department says this was the sixth month in a row that the unemployment rate has dropped from a high of 4.8% in January.
“Over the past 12 months, three major industries—health care and social assistance; leisure and hospitality; and government—have added nearly all of Oregon’s net new jobs, with each up by close to 10,000 jobs while expanding by about 4% to 5%,” according to OED.
Krystal Daibes Higgins from Ferguson Wellman Capital Management, says Oregon’s low unemployment rate means “we have a strong economy and it’s likely to stay resilient.”
“Theoretically, it means that for any person that’s looking for a job, they should be able to find one,” Daibes Higgins said.
While Oregon is experiencing low unemployment rates, the Fed is still working to tackle inflation and just finished “the most aggressive rate hike in history,” Daibes Higgins said.
According to the financial expert, the Fed is waiting to see how the interest rate hike holds up.
“The problem that the Fed is trying to tackle is the inflation issue. Inflation is tricky, it’s not a linear path down; it’s bumpy, it can spike back up. So, the Fed is really trying to make sure that they stamp out any flames of inflation at this point,” Daibes Higgins said.
She added, “the ideal scenario is the Goldilocks situation that we’re in right now where job openings are coming down, inflation is coming down but we’re not seeing complete job destruction or a potentially severe recession.”
According to Daibes Higgins, recession is inevitable, but the timing is uncertain.
“If it does happen, because of the labor market…the severity of it should be short and shallow. That’s not to say consumers are not feeling the pain. Especially, with inflation,” Daibes Higgins said.
She advises consumers to be patient as the Fed works to reduce inflation.
“There will always be volatility in the markets, there will always be a lot of headlines, a lot of negative news and it’s important just to step back for a second and look at whether it’s your investment portfolio, your finances or your spending and just focus on the long term,” Daibes Higgins said. “Typically, when we have a downturn or volatility, the growth after that volatility far outweighs the pain that was endured during the downturn.”