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Economist predicts Juneau to avoid major unemployment

Posted: November 6, 2011 - 12:10am
Russell Price, a Senior Economist for Ameriprise Financial, speaks about national and world economics and how they might affect Alaska during a visit to Juneau on Thursday. Price is a frequent commentator for Bloomberg, BusinessWeek and Reuters.  Michael Penn / Juneau Empire
Michael Penn / Juneau Empire
Russell Price, a Senior Economist for Ameriprise Financial, speaks about national and world economics and how they might affect Alaska during a visit to Juneau on Thursday. Price is a frequent commentator for Bloomberg, BusinessWeek and Reuters.

During a recent visit to Juneau, Ameriprise Senior Economist Russell Price sat down for an interview with the Empire. Price’s expertise is in global and national economics, however he took time to explain how the big picture impacts the economies of Juneau and all of Alaska.

Price is a frequent commentator for Bloomberg, BusinessWeek and Reuters. He was recently cited by Bloomberg Financial as a “Bloomberg Best” for being one of the most accurate economic forecasters in their benchmark consensus survey.

Prior to joining Ameriprise Financial, Price was the senior economist for H&R Block Financial Advisors for seven years. He was also a general equity research analyst for more than six years.

Price was in Alaska to speak with Ameriprise clients in Ketchikan and Juneau.

“Particularly these days, with all that is going on, people have questions,” Price said.

“You work hard, you are busy during the day, you’re still doing the job of two to three people,” Price said of his average client, “you come home at night and turn on the TV and hear more about how we’re still dealing with the European debt crisis.” People ask how much risk is involved in this, how this might affect them and their investments, Price said.

According to economic indicators released by the Juneau Economic Development Council, Juneau’s unemployment rate is relatively low and its housing numbers are solid — compare Juneau’s 5.8 percent unemployment rate with the national rate of 9 percent.

Price commented on Juneau’s relative prosperity.

Price said areas in the U.S. shielded from the worst of the economic downturn are strong natural resource states, as is the case with Alaska’s oil, mining and seafood or North Dakota and South Dakota’s newly developed Bakken oil shale and to a lesser extent Pennsylvania with shale gas. Though slow, the economy has grown and continues to grow, Price said, and so too has the demand for energy grown.

Price said that barring a major event, the recent financial-industry-caused recession is not likely to drag down Juneau’s economy going forward.

“I would not think that you would see a tail effect from the recession,” Price said. “The rest of the United States economy is slowly recovering, I do not expect to see real robust growth, but I think that we are still on a path of slowly recovering. Two months ago lots of people were talking about the potential of a double dip. They’ve pretty much have been proven wrong.”

Price said the U.S. economy is primed for growth.

“Inventories are tight and workforces are stretched thin. Housing affordability is great. Even the stock market, which in 2001 was over valued, the stock market is now attractively valued and in a position to support growth,” he said.

It may not be intuitive that banks in Europe could affect Alaska’s tourism industry. However, Price said that if Europe can sort out its banking crisis, Americans will be more inclined to travel to Alaska.

“As the market comes to the idea that Europe’s plan is actually credible in the long term. As people perceive it to be more credible, the crisis will ease and the value of the Euro will rise,” Price said.

A more expensive Euro means a more expensive European vacations and people will find a better deal in Alaska.

“Over the last few years Americans stayed closer to home,” Price said.

The declining value of the dollar made travel to Europe or Asia more expensive.

“A cruise up the Alaska coast will still be more attractive than a trip to Europe over the intermediate time,” Price said.

Potential visitors to Alaska may also have more expendable cash in future tourism seasons, Price said. Jobless claims recently dropped below 400,000, a key demarcation stage. However, jobless claims need to stay below 400,000 for some time before it is a strong signal, he said.

At the same time employment is increasing.

The U.S. Bureau of Labor Statistics reported on Friday nonfarm payroll employment continued to trend up in October, adding 80,000 jobs.

“Employment in the private sector rose, with modest job growth continuing in professional and businesses services, leisure and hospitality, health care, and mining,” according to the Bureau.

U.S. aggregate wages and salaries have increased and households have pared down debt, Price said. Americans have more disposable income with fewer financial obligations in mortgage or rent, property taxes and insurance, automobile payments and required credit card payments. U.S. Financial Obligations Ratio, the comparison of income to the above expenses, is down to 16 percent from a high of 19 percent. Delinquency rate on credit cards, according to Discover Card, is the lowest it has been since early 1990s. Equifax average credit scores are the highest in four years.

“So people have done a good job of their improving financial balance sheets themselves,” Price said. “With balance sheets much improved and wages and salaries starting to improve and … how expensive is it to go to Europe as opposed to taking a cruise in domestic waters, things should look pretty good for domestic tourism,” Price said.

• Contact reporter Russell Stigall at 523-2276 or at

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