White: Local economy appears to be headed for soft landing

White: Local economy appears to be headed for soft landing

SHREVEPORT - The Federal Reserve has been sending steady signals that it will cut the federal funds rate at its meeting this week for the first time since 2020.

A cut means interest rates will drop, which will bring down the cost of borrowing money on everything from homes to cars and other loans.

Douglas White, the director of the Center for Business and Economic Research at LSUS, said he's usually a staunch Fed critic.

But with inflation around three percent annual growth after peaking at 10 percent after the COVID-19 pandemic, White said the Fed has managed to tackle inflation without skyrocketing unemployment and pushing the economy into a recession.

That means a soft landing for the Shreveport-Bossier economy as well, which White gathers data about for monthly and quarterly reports.

"I would say the Fed has done what I would have thought was relatively impossible," White said. "They pretty much have pulled off a soft landing.

"With the expected rate cut, the Fed wants to be proactive to try and make sure that they don't push the economy into a recession. When we debuted the Economic Dashboard 1.5 years ago, I would have told you that the Fed wouldn't be able to bring down the inflation rate without really damaging the economy.. They've managed to do it, and I think they deserve a lot of credit."

While local unemployment rates crept up in the second quarter, including the City of Shreveport reaching five percent, the latest data from July reflects unemployment dips locally.

Shreveport fell to 4.8 percent, Caddo Parish to 4.6 percent, Bossier City at 3.9 percent and Bossier Parish at 3.8 percent. The national unemployment dipped to 4.2 percent.

The unemployment rate reversal even before the expected interest rate cuts indicate the local economy appears to be on solid footing despite the past several years of inflation and high interest rates.

"Even five percent used to be considered a relatively low unemployment rate, which is one of the leading measures the Fed looks at when they start talking about interest rates," White said. "The other big trend is that inflation has remained pretty consistent year over year around three percent (growth). That's not significantly higher than the Fed's desired target of two percent, but considering 12-18 months ago when we were at nine percent, three is pretty good."

LSUS's Center for Business and Economic Research gathers publicly available data on categories like local tax collection, housing market, unemployment, gas prices, airport traffic, and casino revenue.

"The dashboard puts a finger on the pulse of what's going on in the area economically," White said. "It's designed for people to go to one place to get the data they need to make informed decisions."

The CBER publishes a quarterly report in which the information is compiled in one place while updating most individual data categories on a monthly basis.