While many states are holding their breath to see if the nation will dip into a recession, Louisiana may be safe from a potential economic downturn. Loren Scott, economics professor emeritus, said if the nation enters a recession it will be “short and shallow.” Key indicators, such as employment, do not suggest that we are currently in a recession, he said. Louisiana will dodge the bullet even if the nation enters a recession, Scott said. Louisiana benefits from high oil prices, which pump money in places like Lafayette and Houma. Also, the Gulf Opportunity Zone Act – tax incentives passed by President Bush after Katrina – has boosted construction in huge numbers, he said. The national unemployment rate jumped from 4.7 percent to 5 percent in December – according to The Associated Press – which has deepened expert’s anxieties about an emerging recession. But Scott said unemployment is a “funky measure” for predicting a recession. “Look at employment instead of unemployment as a measure for economic decline,” Scott said. “According to economist.com, employment is still growing even though unemployment up-ticked a little.” Scott said 5 percent is not a worrisome number to indicate any type of problem other than a growth in the labor force – the number of people able and willing to work. Louisiana has an intense labor market shortage, which was evident even before Hurricanes Katrina or Rita, Scott said. “Baby boomers are pushing 60 years old and retiring, so we have a great number of people leaving the labor force,” Scott said. “On top of that, people entering the labor force are declining.” A recession hit Louisiana in 1982 and lasted until 1987, and it caused a lot of women to move to other states like Florida or Texas to find jobs. Louisiana lost births and, as a result, the current labor force is reduced. Anyone who wants a job in Louisiana can have one, Scott said. “Everyone’s nervous about a recession because of small retail sales in December,” Scott said. “Our economy is still growing, although that growth is slow.” December sales were the weakest since 2002 – according to the AP – as consumers cut their spending by 0.4 percent. Scott also said the housing downturn, along with rising energy cost, has caused a nationwide concern, but the housing market is only 6 percent of gross domestic production – total market value of final goods and services produced in a year. Our economy can still grow even if there is a problem in this sector, he said. Richard Stahl, economics instructor, said the housing market is slowing down the economy but is doubtful about the nation entering a recession. The country has already seen the worst of it or, at least, will not see much worse, he said. “I am definetly not sold on the ‘R’-word yet,” Stahl said. “The recession will be very shallow and not long at all, even if a recession does emerge.” But Dylan Heard, economics junior, is not so positive about the economy’s future. “Our economy definitely seems to be heading towards a recession,” Heard said. “It’s too late for the Fed to bail us out even though they’re cutting rates.” Although Scott and Stahl predict a recession will not occur in Louisiana, they said students should always pay attention to the economy because a recession would affect all students. “Graduating students should always worry if a recession is amidst,” Scott said. “Students would even have a hard time finding summer jobs.”   Stahl said a recession would affect students who are seeking their first job. Firms usually pull back on employment, which makes it challenging for job hunters to find opportunities, he said.   But Heard said he would not worry if Louisiana fell into a recession because he will not be looking for a job anytime soon. A recession would not worry him even if he was job searching because it would be minor. “I wouldn’t worry about it regardless,” Heard said. “Unless I was looking for job opportunities in real estate.”
—-Emily Stuart at [email protected]