Economic Analysis Finds Silver Lining
Byline: Joe Mosley The Register-Guard
The U.S. economy has weakened, chances of a recession have increased and national unemployment is on the rise. But the monthly Oregon Small Business Index compiled by Eugene-based LibertyBank concludes that it all means slightly improved conditions for business owners - primarily because of the spike in unemployment.
Jeff Thredgold, a Utah-based economist who compiles the index for LibertyBank, reasoned in his study of business conditions in December that the highest national unemployment rate in two years is likely to push the Federal Reserve to cut its key interest rate later this month by as much as half a percentage point.
"Although the declining national jobs situation weighs on small--business owners, the possibility that the Federal Reserve will again cut interest rates is good for small businesses in Oregon because it will reduce the borrowing costs of small-business owners," Thredgold said in the report released this week.
The Federal Reserve already has made three recent interest rate cuts - by half a point in September and a quarter point in both October and December. Policy-makers at the nation's central bank use interest rate reductions as part of a strategy to ease recessionary pressure by encouraging business investment.
"Obviously, I want the Fed to lower rates," Eugene restaurant owner Jim West said Wednesday. "That's macro economics 101."
West recently has reinvested in his business by opening the Fina Taqueria on South Willamette Street and a third Mucho Gusto restaurant in Medford. His first two Mucho Gusto locations are at Oakway Center and Valley River Center. …