economic outlook: is growth back?
ECONOMIC OUTLOOK: IS GROWTH BACK?
Dr. Michael Walden Reynolds Distinguished Professor North Carolina State University
1
Nation’s Economic Report Card: Real GDP (annualized % change in real GDP)
2
MEANING OF “END TO THE RECESSION”
3
Big Job Losses Have Stopped (thousands of jobs)
4
BUT THE JOB RECOVERY WILL BE SLOW (NONFARM EMP AND UNEMP RATE)
5
CONSUMER SPENDING AT RETAIL STORES HAS RECENTLY SLOWED (billions of 2005 $, seasonally-adjusted, excl. vehicles & parts)
6
INFLATION IS BECOMING AN ISSUE (CPI, total and core)
7
GAS PRICE TRENDS
8
WHAT ARE INTEREST RATES SAYING? (YIELDS ON TREASURY SECURITIES)
9
CONSUMER FINANCIAL BEHAVIOR HAS DRAMATICALLY CHANGED (INDICES)
10
HOUSING PRICES ARE STILL FALLING (ANNUALIZED PERCENTAGE CHANGE)
11
GOVERNMENT POLICY
12
The Fed’s Monetary Policy
13
ON FISCAL POLICY IS MORE STIMULUS NEEDED TO SUPPORT DEMAND OR IS AUSTERITY NEEDED TO REDUCE FEARS OF HIGHER TAXES 14
POLICY ISSUES * NEW TAXES * NEW REGULATIONS * WORKFORCE RETRAINING * FED’S EXIT * FEDERAL DEBT * AGING POPULATION
15
BUT OPPORTUNITIES * FOREIGN MARKETS * TECHNOLOGY * RE-TOOLING – ENERGY, RESOURCES * NUTRITION, HEALTH CARE
16
NORTH CAROLINA ECONOMIY
17
A SLOW N.C. JOB REBOUND
18
2007 Dec 2008 Feb 2008 Apr 2008 June 2008 Aug 2008 Oct 2008 Dec 2009 Feb 2009 Apr 2009 June 2009 Aug 2009 Oct 2009 Dec 2010 Feb 2010 Apr 2010 June 2010 Aug 2010 Oct 2010 Dec 2011, Feb 2011, Apr
N.C. Major Sector Job Changes ( thousands, manuf and prof. serv on left, const and fin. on right)
Manuf Prof Serv. Const Hlth/Edu
540 520 500 480 460 440 420
19
2011, I
2010, III
2010, I
2009, III
2009, I
2008, III
2008, I
2007, III
2007, I
2006, III
2006, I
2005, III
2005, I
2004, III
2004,I
%
NORTH CAROLINA HOME PRICE APPRECIATION RATE (SEASONALLY ADJUSTED, ANNUALIZED, QUARTERLY DATA)
10
8
6
4
2
0
-2
-4
-6
-8
20
Hick Triang W-S
2011 Apr
Grn-HP
2011 Feb
Char
2010 Dec
Ashv
2010 Oct
2010 Aug
2010 June
2010 Apr
2010 Feb
2009 Dec
2009 Oct
2009 Aug
2009 June
2009 Apr
2009 Feb
2008 Dec
2008 Oct
2008 Aug
2008 June
2008 Apr
2008 Feb
2007 Dec
NC Big Metro Job Market Trends (Index, December 2007 = 100)
1.03 1.01 0.99 0.97 0.95 0.93 0.91 0.89 0.87 0.85
21
2011 Apr
2011 Feb
2010 Dec
2010 Oct
R-M
2010 Aug
2010 June
2010 Apr
Greenv
2010 Feb
2009 Dec
2009 Oct
2009 Aug
Fayet
2009 June
2009 Apr
2009 Feb
Burl
2008 Dec
2008 Oct
2008 Aug
2008 June
2008 Apr
2008 Feb
2007 Dec
NC Small Metro Job Market Trends (Index, December 2007 = 100)
Wilm
1.02
1
0.98
0.96
0.94
0.92
0.9
0.88
22
23
FORECASTED ANNUAL JOB GAINS IN NC (non-farm employment)
2011: 50,000 2012: 65,000
24
NORTH CAROLINA ISSUES
* COMPETITIVE TAXES * INFRASTRUCTURE * WORKFORCE TRAINING * BALANCED GROWTH * ECONOMIC TRANSITION 25
BUT MANY NORTH CAROLINA ASSETS
* Competitive labor costs * In the “sunny” South * Population growth * Innovative, cuttingedge industries
26
Dr. Michael Walden Reynolds Distinguished Professor North Carolina State University
1
Nation’s Economic Report Card: Real GDP (annualized % change in real GDP)
2
MEANING OF “END TO THE RECESSION”
3
Big Job Losses Have Stopped (thousands of jobs)
4
BUT THE JOB RECOVERY WILL BE SLOW (NONFARM EMP AND UNEMP RATE)
5
CONSUMER SPENDING AT RETAIL STORES HAS RECENTLY SLOWED (billions of 2005 $, seasonally-adjusted, excl. vehicles & parts)
6
INFLATION IS BECOMING AN ISSUE (CPI, total and core)
7
GAS PRICE TRENDS
8
WHAT ARE INTEREST RATES SAYING? (YIELDS ON TREASURY SECURITIES)
9
CONSUMER FINANCIAL BEHAVIOR HAS DRAMATICALLY CHANGED (INDICES)
10
HOUSING PRICES ARE STILL FALLING (ANNUALIZED PERCENTAGE CHANGE)
11
GOVERNMENT POLICY
12
The Fed’s Monetary Policy
13
ON FISCAL POLICY IS MORE STIMULUS NEEDED TO SUPPORT DEMAND OR IS AUSTERITY NEEDED TO REDUCE FEARS OF HIGHER TAXES 14
POLICY ISSUES * NEW TAXES * NEW REGULATIONS * WORKFORCE RETRAINING * FED’S EXIT * FEDERAL DEBT * AGING POPULATION
15
BUT OPPORTUNITIES * FOREIGN MARKETS * TECHNOLOGY * RE-TOOLING – ENERGY, RESOURCES * NUTRITION, HEALTH CARE
16
NORTH CAROLINA ECONOMIY
17
A SLOW N.C. JOB REBOUND
18
2007 Dec 2008 Feb 2008 Apr 2008 June 2008 Aug 2008 Oct 2008 Dec 2009 Feb 2009 Apr 2009 June 2009 Aug 2009 Oct 2009 Dec 2010 Feb 2010 Apr 2010 June 2010 Aug 2010 Oct 2010 Dec 2011, Feb 2011, Apr
N.C. Major Sector Job Changes ( thousands, manuf and prof. serv on left, const and fin. on right)
Manuf Prof Serv. Const Hlth/Edu
540 520 500 480 460 440 420
19
2011, I
2010, III
2010, I
2009, III
2009, I
2008, III
2008, I
2007, III
2007, I
2006, III
2006, I
2005, III
2005, I
2004, III
2004,I
%
NORTH CAROLINA HOME PRICE APPRECIATION RATE (SEASONALLY ADJUSTED, ANNUALIZED, QUARTERLY DATA)
10
8
6
4
2
0
-2
-4
-6
-8
20
Hick Triang W-S
2011 Apr
Grn-HP
2011 Feb
Char
2010 Dec
Ashv
2010 Oct
2010 Aug
2010 June
2010 Apr
2010 Feb
2009 Dec
2009 Oct
2009 Aug
2009 June
2009 Apr
2009 Feb
2008 Dec
2008 Oct
2008 Aug
2008 June
2008 Apr
2008 Feb
2007 Dec
NC Big Metro Job Market Trends (Index, December 2007 = 100)
1.03 1.01 0.99 0.97 0.95 0.93 0.91 0.89 0.87 0.85
21
2011 Apr
2011 Feb
2010 Dec
2010 Oct
R-M
2010 Aug
2010 June
2010 Apr
Greenv
2010 Feb
2009 Dec
2009 Oct
2009 Aug
Fayet
2009 June
2009 Apr
2009 Feb
Burl
2008 Dec
2008 Oct
2008 Aug
2008 June
2008 Apr
2008 Feb
2007 Dec
NC Small Metro Job Market Trends (Index, December 2007 = 100)
Wilm
1.02
1
0.98
0.96
0.94
0.92
0.9
0.88
22
23
FORECASTED ANNUAL JOB GAINS IN NC (non-farm employment)
2011: 50,000 2012: 65,000
24
NORTH CAROLINA ISSUES
* COMPETITIVE TAXES * INFRASTRUCTURE * WORKFORCE TRAINING * BALANCED GROWTH * ECONOMIC TRANSITION 25
BUT MANY NORTH CAROLINA ASSETS
* Competitive labor costs * In the “sunny” South * Population growth * Innovative, cuttingedge industries
26
