Local Analysts: No Need to Panic About Economy

When the Federal Reserve Board lowered interest rates last week by a half-point in response to a slowing economy, many consumers concerned that the cut was too conservative pulled out of the stock market.

But UNC economic and finance professors say that while the economy is not as robust as in recent years, the doomsday projections of some analysts and politicians are misleading.

"I don't see it as a sign of (economic) decline," said economics Professor Patrick Conway.

"The Federal Reserve is an organization designed to stabilize the economy, and it must have seen something in the economy which led it to cut the interest rates.

"It is something that happens because the economy is slowing."

And finance Professor John Pringle said the odds are against a recession.

"I think the recent changes badly damaged consumer and business confidence," he said. "I am concerned, (but) I don't think there will be a recession.

"I think there will be a period of flat growth in the economy because the economy is fundamentally sound. The odds are 60-40 that we will not have a recession."

The professors are in agreement, however, that UNC seniors could face a tougher time finding a job than their predecessors.

"I don't want to be a pessimist, but the seniors don't face as good of an environment as seniors in the past have," Pringle said. "The students that have not done as well (in school) might be the ones that have trouble."

Conway said he saw both potential harm and good in the seniors' futures.

"The economy slowing down could make it harder to find a job, but not too hard because unemployment is at a historically low rate," he said. "The actual interest rate cut is a positive for seniors because it should encourage businesses to expand somewhat, which will keep seniors on the job market.

"But we won't see the effects of the policy on hiring decisions for another couple of months."

Edward Goode, a senior mathematical science major from Greensboro, said he is relatively unworried about finding a job.

"As long as the economic problems are not long-term, I'm not really concerned about finding a job," Goode said. "It's not like there are less jobs; the employers just might be a little more picky."

Pringle acknowledged the lack of stability in the job market but said the effects thus far will be mild.

"The students that work hard and have done well in school should do fine."

The University Editor can be reached at udesk@unc.edu.