Utah economist says no need to fear stalls in U.S. economy

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Keith McCord reporting Feeling a financial pinch, Americans have tightened their wallets and pocketbooks. That's pushing consumer spending down and stalling the U.S. economy.

President Bush discussed the economy today from New York. He said it is obviously going through a tough time.

A Utah economist echoed the president's thoughts today and told Eyewitness News the nation and Utah have been here before.

It is a bit frustrating and frightening, perhaps, to continually hear about falling housing prices, bad mortgage lending practices, talk of recession, how weak the dollar is abroad, and stock market averages that are continually in flux. But chief economist for Zion's Bank Jeff Thredgold says don't panic, we've been down this road before.

President Bush gestures while speaking about the economy during an address before The Economic Club of New York, Friday, March 14, 2008, in New York. (AP Photo/Charles Dharapak)

"But it's one of those times. We had one six or seven years ago, you know. I make the case that we do this every 10 years," Thredgold said.

Let's be honest here, things are a bit sluggish and will take some time to turn around, but Thredgold says there are certain indicators he sees that give him confidence. For example, the Dow Jones industrial average is still extremely high.

"In my mind, if things were as serious and as threatening as some people suggest, the Dow would be at 6,000 or 7,000. But we're at levels that were record levels 18 months ago," Thredgold explained.

Regarding the mortgage financing crisis, lenders have made changes to improve the system, although it may be more difficult now for prospective home buyers to qualify for some loans.

For Utah, lower-priced homes are still selling OK, but there's a huge oversupply of mid-priced homes. However, thanks to a steady in-migration of people, that problem will, over time, get resolved.

Thredgold sums up our economy with an analogy. "We use the analogy that we're slowing down from about 75 miles per hour to 45 miles per hour, while the U.S. economy is parked by the side of the road," he said.

So, how should we deal with all these economic messages that constantly keep flying at us as we go about our daily lives? "It's one of those times where you should just take a big breath and just ride it out," Thredgold said.

Thredgold says to expect the Federal Reserve to cut short-term interest rates again next Tuesday. That means rates for things like equity loans and credit card balances will drop.

E-mail: kmccord@ksl.com