Economy shows healthy signs

SANDPOINT — While the economy still feels stuck in the mud, the situation is slowly but surely improving in key areas, according to a economic overview Thursday.

Glacier Bancorp president and CEO Mick Blodnick visited Sandpoint to present an economic outlook for the near future. While he said three economic headwinds, namely a potential Eurozone meltdown, the upcoming U.S. fiscal cliff when a variety of laws either expire or go into effect at the end of the year and the impact of unemployment on consumer confidence create some uncertainty, conditions are otherwise improving.

“But if we do experience another unexpected economic or financial shock, disregard everything I’ve said,” he said at the end of his presentation to many laughs.

Indeed, the presentation was punctuated with plenty of comedy. Blodnick included some thematically appropriate cartoons as he moved from topic to topic that kept the audience chuckling throughout his observations.

There were other things to feel good about in regard to the economy, too, although all were tempered by the reality of the slow recovery. For one thing, the high fuel prices predicted for this time period weren’t as bad as originally feared. In addition, the national unemployment rate is finally under eight percent.

“It’s probably not yet to where most people want it to be, but it’s getting better,” Blodnick said.

In addition, the Federal Reserve has maintained low interest rates, which makes the financial world great for borrowers and tough for savers. Coincidentally, it maintains the great environment for purchasing homes, according to Blodnick. With mortgages available at rock-bottom interest rates, the prospect of a home purchase is more appealing than ever to many individuals. It also means that individuals are refinancing more frequently than ever — in fact, they accounted for 69 percent of mortgage origination volume.

“These are astounding rates,” Blodnick said. “I would never have dreamed we would see rates at these levels.”

Blodnick had a mixed report for the banking industry. While earnings were up 20 percent from last year and only 43 banks closed so far this year compared to 92 last year, he also said tougher regulations created a bigger burden for smaller banks. Blodnick predicted this would result in many mergers and acquisitions among banks in the near future.

With several key markets like department stores and auto sales showing improvement, Blodnick maintained a cautiously optimistic tone throughout the presentation. However, he said the situation could show bigger improvements through increased consumer confidence — namely through improved home and stock values.