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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
Job Growth Has Turned Positive
4
BUT THE JOB RECOVERY WILL
BE SLOW (NONFARM EMP AND UNEMP RATE)
5
CONSUMER WEALTH AND INCOME
HAVE REBOUNDED
(billions of 2005 $)
6
CONSUMER FINANCIAL BEHAVIOR HAS
DRAMATICALLY CHANGED (INDICES)
7
BUT CONSUMER SPENDING AT RETAIL
STORES IS INCREASING
(billions of 2005 $, seasonally-adjusted, excl. vehicles & parts)
8
CORPORATE PROFITABILITY HAS
ALSO IMPROVED
(PRE-TAX, % OF GDP)
9
HOUSING MARKET HAS NOT IMPROVED
CONSISTENTLY
10
HAVE HOUSING PRICES STOPPED FALLING?
(ANNUALIZED % CHANGE)
11
INFLATION IS CURRENTLY NOT A PROBLEM
(CPI, total and core)
12
ARE INTEREST RATES POISED TO RISE?
(YIELDS ON TRESURY SECURITIES)
13
GOVERNMENT POLICY
14
The Fed’s Monetary Policy
15
FISCAL POLICY – RISING DEBT
16
Social Security, Medicare, and
Medicaid are Driving Federal Spending
17
NORTH CAROLINA ECONOMIY
18
NC JOBS HAVE BEGUN TO COME BACK
19
N.C. Major Sector Job Changes
( thousands, manuf and prof. serv on left, const and fin. on right)
Manuf
540
520
500
480
460
440
420
Prof Serv.
Const
Hlth/Edu
610
560
510
460
410
360
310
260
210
160
20
Unemployment Rate Forecasts
11.5
11
10.5
%
10
9.5
US
9
NC
8.5
8
21
Goldsboro Metro Job Market Trends
(Index, December 2007 = 100, seas. adj.)
1.03
1.01
0.99
0.97
0.95
0.93
0.91
0.89
0.87
22
Goldsboro and N.C.: May Unemployment Rate
(seasonally unadjusted)
23
WRAP UP: WHAT’S AHEAD?
No “double dip”, but slow
growth
Household debt reduction
is the key
Keen competition for
growth – NC well
positioned
24