Market Fluctuations May Stagger Local Economy, Though Slowdown Was Expected
Louisville-area manufacturers and ancillary businesses will likely feel the most pain from this week's market fluctuations.The Dow's plummet on Monday and shaky rally on Tuesday shook several industries, but Indiana University Southeast business professor Uric Dufrene says any effects on manufacturing will be most noticeable locally. In addition to rattling manufacturers, the plummet and rally in the Dow have likely made consumers less confident. The same goes for the recent credit rating downgrade, though treasury bonds remain popular and interest rates will remain low."The rates on treasuries are actually declining," says Dufrene. "And they declined after the S&P rating downgrade. So we can't say investors are less confident, less optimistic in U.S. treasury bonds when rates are actually lower."So Louisville, like many other cities, may face a general financial malaise as a result of this week's events. But Dufrene says that probably would have happened anyway."I was expecting the local economy to somewhat slow down–and this is going back to April and May–because of some of the indicators that were flashing," he says. "Job growth has slowed somewhat the first quarter, second quarter of the year."Consumer perception clashes with reality again in the housing market. Mortgage rates are low, but sales are sluggish.