An update on the economy

As tariffs could lead to economic shocks, the numbers suggest that the economy is in a soft landing, a phase in the economy when inflation begins to slow down, but not dip into a recession.

Jim Rounds, the CEO of Rounds Consulting Group, joined “Arizona Horizon” to discuss the latest happenings with the economy.

Some notable points include the federal interest-rate decisions, July job numbers and tariff deadlines.

Investors have been keeping tabs on all these points of interest along with employment and inflation levels. Questions are being raised as to how all of these factors will impact the future of the economy and future interest rate cuts.

As tariffs are applied, businesses will turn the extra cost around to their customers by the end of the year, which will likely lead to higher inflation at levels that are not being seen. Until another spike in inflation comes, Rounds said, the Federal Reserve will be able to make interest-rate decisions.

“It eventually will go to the consumers, but we’re in that period where we’re just implementing some of the tariffs,” Rounds said. “Those weak job numbers, without a big jump in inflation, which I’m not expecting right away, should give the Federal Reserve Board the ability to lower rates.”

Overall, economic uncertainty will translate into a decrease in economic activity; however, Arizona’s technology sector is a part of what will keep the state’s economy active during this dip.

“We also have these gains from our technology, and this is going to be particularly important in Arizona,” Rounds said. “We went through that whole computer revolution, productivity numbers went through the roof. That’s what changed, basically, the world and people’s living standards, and everything else.”

If Arizona can get through this mild economic downturn, Rounds said, there is a positive economic boost waiting at the other end.