As the General Assembly begins budget negotiations in ernest, building up the state’s savings accounts should be a top priority for long term fiscal health and preparing for changes in the economy. Building on previous reforms should keep NC on the right path.
NCSU’s Dr. Michael Walden issued a third quarter economic forecast this week that gives us at least one expert’s ideas on where the economy is going over the next few months. Comparing the recovery from the 2008 recession to a football game, he has this to say about North Carolina’s economy:
The economy is now in the third quarter. The recovery – which is in its sixth year – will continue. Production, jobs, wages, and incomes will all improve in 2015, both in the nation and in North Carolina. Unemployment rates will trend lower, but improvements will be modest as individuals who previously stopped looking for work – and therefore were not counted as unemployed by the “headline” jobless rate – will re-enter the labor force.
In the nation, nonfarm payrolls will increase 2.5%, generating 3.6 million jobs. In North Carolina, nonfarm payrolls will also improve by 2.5%, resulting in 105,000 additional payroll jobs. Wages in both the nation and the state will begin to accelerate their gains.
Within North Carolina, the fastest growing regions will continue to be the larger metropolitan areas, particularly those in an arc from the Triangle west to the Triad and south to Charlotte. Several regions – mainly in the eastern section of the state – continue to struggle – having very low or negative job growth.
And although he has some concerns, his predictions for NC’s economy in the rest of 2015 are positive and encouraging:
Still, real GDP and nonfarm payrolls will increase for the remainder of 2015. Real GDP is forecasted to improve by between 2.5% and 2.75%, and nonfarm payrolls are expected to rise by 2.5% – the same rate as the nation. This will tranlate to 105,000 additional payroll jobs in the state. The headline unemployment rate – registering 5.7% in May – will fall to 5.5% by year’s end. The reduction in the headline jobless rate will be cushioned by the return of “discouraged workers” as the labor market improves.
Bottom line: North Carolina is on the right track. Jobs are being created, unemployment numbers are decreasing and a healthy recovery is underway in NC. But there’s still a lot of work to do and decisions made by the leadership, with lower taxes, more reasonable regulations, confidence of property rights, and responsible fiscal management will keep NC on the right path. Let’s get busy.