NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss said interest rate reductions may happen this year, but it's not necessarily going to be headed back down the way it went up.
"The U.S. Federal Reserve has at least implied they are going to reduce interest rates three times this year," Goss said. "Investors say six or seven times. I'm on the side of the Fed in this one. I think it will be three times. What it has done is weaken the value of the dollar."
Though this past Friday's job report was strong, Goss said that's not the one to look at.
"What to watch out for is the employment report, which comes out in February," Goss said. "It's the one in February that we need to watch out for. We had some job cuts, some fairly big job cuts by companies like Nike. We'll have to wait and see. If that employment report for the first Friday in February, if that's below 50,000 then it's going to be a lot rougher."
Given that Goss doesn't think a rate cut is coming until March, if there ends up being pessimism in the job market, that could hold off rate cuts even longer. However, the untying of jobs from locations via remote work makes it hard to pinpoint exactly what the job report may look like.
"A lot of workers across America are not coming back to the office," Goss said. "It is sort of a new normal, that's what we're seeing right now. That's having some real impacts on commercial real estate, particularly in the large cities, downtown locations particularly. There's office space a plenty, the prices are coming down. We're going to see some failures there. I don't expect that to spread over into the broader economy."
The December jobs report that came out on Friday, Jan. 5 said from December 2022 to December 2023, payrolls grew by 2.7 million, or an average of 225,000 per month.
CLICK HERE to download the Hutch Post mobile app.
CLICK HERE to sign up for the daily Hutch Post email news update.