For its latest episode of Elevating The Conversation, the Journal sat down with Ryan Herzog, an economics professor at Gonzaga University, for its Mid-Year Economic Outlook.

The Elevating The Conversation podcast is available on Apple Podcasts, Amazon Music, Spotify, and elsewhere. Search for it on any of those platforms or the Journal's website to hear the entire conversation, but for now, here are five takeaways — edited for space and clarity — from the episode.

1. Despite some signs of a healthy economy, it doesn’t necessarily feel that way to everyone.

If you open up the newspaper and look at some of the headline print, what you're gonna see is some data on GDP growth that's going to look fairly robust. You're gonna see maybe some worrisome data on the labor market right now, and particularly tied to inflation, you'll see some worrisome data.

But you might look at your morning ticker on your news show and stock markets, and the Dow Jones is still over 50,000, and you see all these other kinds of national measures that are saying things are pretty good.

But then you talk to your neighbor, you talk to your friends, or depending on what industry you're working in, it seems like maybe the sky might be falling or coming close to that.

I think there is this divide where consumers are feeling a little bit of some of these pressures that aren't directly gonna get captured in some of these national reports.

 If you're talking to a recent college grad right now, they're looking at a labor market that's pretty dicey. A lot of fields that were once incredibly desirable fields to head into — computer science, accounting, some of these other tech spaces — all of a sudden have been turned on their head. So, a 22- or 23-year-old is gonna have a very different perception of how the economy is, given the lack of hiring.

But then you take someone that might be 65, 70, that's at that retirement stage. They're looking at their retirement portfolio; they've been able to capture some of these gains in the stock market. Housing prices, despite the higher interest rates, have remained elevated, so housing equity has stayed fairly robust.

Someone that's older is able to capture these high rates and enjoy that little boost into their savings accounts, and it really is a polarized kind of economy, and a lot of it just centers into where people are in their current space.

2. The divide between what people are experiencing and what they’re hearing about the economy in the news is even more pronounced in Spokane.

Companies are feeling more and more of the pricing pressures from Washington state.

Gas prices here are higher than Idaho and most other states. The cost of goods and services in Spokane over the last 10 years has increased.

So, when you see these headline reports on your CBS, NBC, I'm thinking of the Morning Show, Today Show that people just watch as they're getting kids off to school, you're hearing a national report and you're like, "This is not what I'm experiencing at all in our local community." And it's not.

There are certainly affordability issues in Spokane, and this is always what's shocking, when I say it's not housing, because housing largely in Spokane is roughly what you would see at the median price level across the country. But it's in the goods and services, it's eating out, it's grocery shopping, it's gas, it's clothes. Utilities have gone up pretty noticeably. It’s in the everyday things we're buying that we're noticing the higher prices.

I think the Inland Northwest pressures are certainly a magnification of what's going on nationally.

3. Spokane-area businesses that compete nationally face additional challenges operating in Washington state.

 I saw it firsthand being in higher ed, where Gonzaga is competing for students across the country, and with my own son traveling across the country to tour colleges and seeing the price differentials just in room and board and seeing the differences in food costs.

When it costs us as a university 20%, 30% more to provide a meal plan to a college student compared to schools in the Midwest and back East, well, that's a direct competitive disadvantage for higher-ed schools in Washington state.

Now compared to California, it's about the same, maybe a little bit cheaper here. But that's not all of who we're competing with for students.

If you are a business where you're competing nationally with other suppliers, then you're gonna find potentially some challenges with the labor costs, you have a minimum wage, you have minimum salary thresholds, you have parental leave policies. Not to say these are good or bad, there's just a consequence and it shows up in the cost of providing services.

At the same time, you are providing more money into that community, so for some of the business that are able to capture the income from that worker, they're gonna be doing better.

So, we get more of that divide at the business level. Some businesses are booming because they can target in on this Inland Northwest area. Others might be struggling a little bit as the price pressures of Washington state are putting a little bit of a burden on their operating costs.

4. The Inland Northwest economy will likely remain steady throughout the rest of 2026.

 I think there's a lot of the national headwinds that are going to continue to play out in Spokane.

I don't have a lot of faith we're gonna see interest rates come down quickly throughout 2026. The Fed has a new chair coming in; I don't see him having much of an impact to bring down interest rates. I know the president wants to see interest rates lower, and I know they're arguing the AI boom is going to create some deflationary pressures. But inflation is still pretty elevated and not showing a lot of signs of cooling off throughout 2026.

With interest rates being elevated, the housing market has stayed fairly lukewarm. It hasn't cooled off; homes are still turning over. There are still buyers out there looking at Spokane to live. The housing market has remained fairly robust for all things considered.

For 2026, throughout the Inland Northwest, I think you're gonna still see a little bit more of the same.

I worry that Spokane is very dependent on some tourism dollars. I worry that we might not see as many people coming over for Hoopfest with gas prices where they are. Are all these families that come over from the West Side gonna travel over here this year? We host a lot of events at the Podium, the Convention Center. As people are starting to look at airfare pricing, gas prices, are they gonna continue to do that?

 We are still growing. You still see buildings going up. You still see housing developments popping up here and there. There's still lots of positives in the community. The downtown is seemingly getting a bit better day by day. Still lots of challenges down there, but you are seeing some positives in Spokane throughout 2026.

I don't think you're gonna see a massive surge of unemployment or a complete drop of consumer spending. Spokane seems to be fairly robust right now. So, a lot of what you're hearing at the national level I think is just gonna continue to trickle down and impact Spokane like it has been for the last year or so.

5. Inland Northwest employers should continue to be quick to adapt to unexpected economic changes.

 What we've learned with the last two years is, how do you prepare for the unexpected?

How do you prepare for potentially a complete reshuffling of your supply chain from tariffs? How do you prepare for an extra $1.50 per gallon for gasoline if you're dependent on transportation, shipping, if you're running a fleet of vehicles? How do you prepare for that?

Looking at future oil prices, they're coming down a little bit, but again, that's just gonna be dependent on the news cycle of the day it feels like.

So for that Inland Northwest business, I think it just depends on if they are competing against national competitors. And if so, then they're gonna have to get more creative, because the pricing pressures aren't gonna subside.

In January of next year, minimum wage is gonna jump another 4% with the current inflation at 4%. We know that's gonna be an increase in pricing for a lot of companies. Fuel's gonna stay elevated. Insurance rates are still through the roof for many businesses.

If you're competing locally, then I think there's enough spending to sustain those businesses, but they're still gonna face those pricing pressures, it's just their competitors are as well.