economic outlook: is growth back? dr. michael walden reynolds distinguished professor north carolina...
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ECONOMIC OUTLOOK: IS GROWTH BACK?
Dr. Michael WaldenReynolds Distinguished ProfessorNorth Carolina State University
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Nation’s Economic Report Card: Real GDP (annualized % change in real GDP)
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MEANING OF “END TO THE RECESSION”
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Job Growth Has Turned Positive
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BUT THE JOB RECOVERY WILL BE SLOW (NONFARM EMP AND UNEMP RATE)
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CONSUMER WEALTH AND INCOME HAVE REBOUNDED (billions of 2005 $)
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CONSUMER FINANCIAL BEHAVIOR HAS DRAMATICALLY CHANGED (INDICES)
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BUT CONSUMER SPENDING AT RETAIL STORES IS INCREASING (billions of 2005 $, seasonally-adjusted, excl. vehicles & parts)
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CORPORATE PROFITABILITY HAS ALSO IMPROVED (PRE-TAX, % OF GDP)
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HOUSING MARKET HAS NOT IMPROVED CONSISTENTLY
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HAVE HOUSING PRICES STOPPED FALLING?
(ANNUALIZED % CHANGE)
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INFLATION IS CURRENTLY NOT A PROBLEM (CPI, total and core)
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ARE INTEREST RATES POISED TO RISE? (YIELDS ON TRESURY SECURITIES)
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GOVERNMENT POLICY
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The Fed’s Monetary Policy
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FISCAL POLICY – RISING DEBT
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Social Security, Medicare, and Medicaid are Driving Federal Spending
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NORTH CAROLINA ECONOMIY
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NC JOBS HAVE BEGUN TO COME BACK
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N.C. Major Sector Job Changes ( thousands, manuf and prof. serv on left, const and fin. on right)
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160210260310360410460510560610
420440460480500520540
Manuf Prof Serv. Const Hlth/Edu
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Unemployment Rate Forecasts
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8
8.5
9
9.5
10
10.5
11
11.5
%US
NC
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Goldsboro Metro Job Market Trends (Index, December 2007 = 100, seas. adj.)
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0.870.890.910.930.950.970.991.011.03
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Goldsboro and N.C.: May Unemployment Rate (seasonally unadjusted)
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WRAP UP: WHAT’S AHEAD?
No “double dip”, but slow growth
Household debt reduction is the key
Keen competition for growth – NC well positioned
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