Mid-year economic forecast
As we enter the second half of 2014, economists like to update their forecast. Host Mary Walden asks her husband, NC State economist Dr. Mike Walden, about his bi-annual North Carolina economic outlook. “What does your crystal ball show for the economy over the next six months?” she says.
Mike Walden: “Well Mary, as always, most times economic outlooks are a mix of pluses and minuses. It really depends on are there more pluses or minuses or are they reversed. And in terms of where North Carolina is right now, and where I see it going in the next six months, I do see several pluses. I think we will continue to see job growth. There was a little concern earlier this year when we had a reduction in gross domestic product at the national level; some people were talking about the recession. I think that was much overplayed. So, I do think we’re on track to continue to add jobs. I think maybe when the year is all done, (we’ll have) 80,000-85,000net new payroll jobs. The economy is also producing more. Gross domestic products are a measure of aggregate production. In fact, we’ve been actually outpacing the nation. I think that will continue. Now, the unemployment rate may not drop as much as would be expected with these positive notes, because I think as the economy improves, more people who are unemployed, but have stopped looking for work and technically are not counted officially as unemployed, are going to start looking for work. And so I think that’ll keep a floor under the unemployment rate. So, I think at the end of the year we’re still going to be in the 6 to 6.5 percent unemployment range for the state. Now on the negative level, wages are still going down. Many households clearly have not recovered from the recession, particularly young households, and they’re not confident about the economic outlook. And the housing market, although the housing market has clearly improved, it’s really not taken off. We’ve not seen a big surge in construction jobs. So, we’re really waiting for that to happen. I don’t see much change there though at the end of the year.”Category: Economic Perspective