Analysis Brief – January 10, 2014

2014 ECONOMIC OUTLOOK SPECIAL!

This post may be updated as information become available over the course of the next couple days.

With the New Year comes resolutions, and predictions. This is especially true about the direction of the economy. During our Winter Conference, Wells Fargo Economist Michael Brown shared a few, as noted in the following slides:

The day before this presentation in Asheville, fellow Wells Fargo Economists John Silvia, Jay Bryson and Mark Vitner shared their 2014 Economic Outlook. Overall, they see continued growth in the overall economy, while they are less “excited” about accelerating employment growth, a challenging issue for many places across North Carolina and the rest of the country.

This week, economic outlook presentations hosted by the North Carolina Chamber of Commerce (Monday) and Greater Raleigh Chamber of Commerce (Friday) offered additional perspectives.

NC Chamber/NC Bankers Association Economic Outlook

Most notable presentations during this annual morning meeting and luncheon were a conversation on the future of North Carolina’s military presence, and its economic impact, along with an update from Governor Pat McCrory.

Click Here for NC Military Presence Discussion Video

Click Here for Governor McCrory’s Remakrs Video

 (Running Commentary)

Presentations Coming Soon

Greater Raleigh Chamber 2014 Economic Outlook

Two of the strongest economic voices in the Mid-Atlantic headlined this event. Wells Fargo’s John Silvia joined Richmond Fed District President Jeffrey Lacker for a comparative presentation of outlooks for the coming year, as well as discussion with the audience.

Click Here for Video of the Presentations by Silvia & Lacker

 (Running Commentary)

Click Here for Richmond Fed President Lacker’s Prepared Remarks

Forecasts from North Carolina Economists

Several noted economists across the state have updated their outlooks for the coming year.

Dr. Michael Walden shared his seasonal and start-of-year outlook back in December. Dr. Walden anticipates 2.75% growth in 2014 for the national economy, with 100,000 new jobs for North Carolina residents, though many of those will be concentrated in select metropolitan areas, like Asheville, Charlotte, Raleigh and Durham.

Click Here for Dr. Walden’s Winter 2013/14 Outlook

Dr. Woody Hall with UNC-Wilmington shared his outlook for Southeastern North Carolina earlier this week during a forum hosted by the Wilmington Area Chamber of Commerce. Hall predicts 2.5% economic growth for the Wilmington-New Hanover County area in 2014, consistent with 2.5% growth this past year.

Click Here for Dr. Hall’s 2014 Outlook Presentation

Appalachain State’s Harry Davis offered an overview during the NC Chamber of Commerce/NC Bankers Association forum this past Monday. Click here for an article summarizing his comments (TBJ).

Dr. John Connaughton of UNC-Charlotte has not yet released an outlook for 2014 (stay tuned for an update).

Analysis Roundup – June 10, 2013

Next edition will be published June 17th

Click Here to Participate in our Online Feedback Survey

NC House Released Budget Proposal, Comparison to Senate Available

The NC House released their 2013-15 biennium budget proposal late Sunday evening. The bill will be debated in the House Appropriations Committee, starting 8:30am tomorrow morning (click here to listen to the meeting as it happens).

Late this afternoon, the NC League of Municipalities published a comparison (click here to view) of how the House plan impacts cities and towns within the state, and how these impacts compare to the version already passed by the Senate. Overall, the House version appears to avoid some of the more noticeable cuts to programs and allowances provided for municipal governments, including the following:

  • Senate budget eliminates the provisional hold harmless allotment for select local governments, while the House version continues it
  • Senate budget eliminates funding for the NC Rural Center, reallocating funds for a new program to be administered by the Department of Commerce. The House proposal, on the other hand, does not eliminate funding and actually increases funding by $3.4 million in FY 2015.
  • Senate budget eliminates the Clean Water Trust Fund, while the House proposal continues and increases funding support.
  • Senate budget reduces Parks & Recreation Trust Fund Grant program by approximately $16.5 million, while the House proposal does not.

We will update this post to include analysis of the House proposal for counties once it becomes available from NCACC.

House Proposal Resources:

Appropriations Committee Report

Budget Proposal (Bill)

WRAL Stories:

House budget lays out stark differences with Senate

House budget subcommittee documents (includes links)

NC House Tax Reform Revised

The NC House will likely vote this week on a tax reform bill that was revised last week to provide some protection for municipal governments with respect to their revenue from utility franchise taxes.

A rundown comparing the House plan to the Senate plan and an alternative proposal (provided by the NCLM) has been updated to reflect these changes (click here to view).

NCLM provided an overview of the change in last Friday’s LeagueLINC Newsletter:

The previous version of HB 998 provided that each city and town would receive distributions each year in the future equal to the amount it received in electricity and natural gas franchise tax distributions for FY 13-14. The new version of the bill will continue to keep city electricity and natural gas revenue at the FY 13-14 level or higher, but only if sales of gas and electricity do not decline below the FY 13-14 level. While such a decline in electricity sales is unlikely, the sensitivity of natural gas sales to winter temperatures makes a decline in these sales more possible.

Bond Referendum Debt Information Bill Modified

Click here to view the revised version.

Per NCLM:

The Senate Finance Committee gave its approval this week to HB 248 Taxpayer Debt Information Act, which would require bond order information to include an estimate of the interest to be paid on the bond, and would require that any bond referendum include a statement that the bond repayment will include interest and that additional taxes may be required for repayment. The League opposed the original version of the bill because it required the estimate of the amount of interest be written into the referendum. Bond attorneys had indicated to the State Treasurer that this requirement could invalidate a debt issuance because interest rates at the time of the issuance are likely to be different than estimated rates submitted on the ballot. The current version of the bill avoids this problem.

LGC Issues Memo on New Unemployment Insurance Requirements

The Local Government Commission distributed guidance last week on the requirements regarding reform of the Unemployment Insurance program adopted by the Governor and General Assembly earlier this year.

Click Here to View the LGC Memo (PDF)

The instructions appear to align with the information we shared in a special presentation that was part of our Analysis Roundup on March 22nd.

Click Here to View the Original NCLGBA Tutorial

North Carolina GDP Grows 2.7% in 2012

The state’s gross domestic product grew 2.7% last year, on pace with all of our neighboring states except Tennessee, though higher than the regional (2.1%) and national (2.1%) aggregates.

gsp_0613SE

Comparatively-speaking, North Carolina continues to outperform the regional and national economy, a trend that has continued since 2005.

ComparativeGDPGrowth9712NC

 

Walden’s Outlook for Summer 2013

NC State University Economist Dr. Michael Walden recently-published his Economic Outlook for the summer. You can view it here (PDF).

Here’s some of Dr. Walden said about the North Carolina economy at the present:

Evidence suggests the North Carolina economy has been growing slightly faster than the national economy. Growth in both labor compensation (a proxy for gross domestic product) and payroll employment has been better in the state during the past three years. The state’s retail, housing, and public revenue sectors also show solid signs of having turned the corner to improvement…

North Carolina is expected to add over 100,000 payroll jobs in both 2013 and 2014, and by the end of 2014 the state’s jobless rate will have dropped to 6.8%. Four factors will push the state’s economic recovery: a manufacturing revival, a construction surge, a boost in college graduates attracting knowledge-based industries, and an influx of retirees. The Triangle and Asheville regions will have unemployment rates under 6% by the end of 2014, while Rocky Mount will still have a double-digit jobless rate…

True to the state’s pattern of a more volatile business cycle, labor compensation fell relatively more during the peak recessionary year of 2009 in North Carolina than in the U.S. However, the rebound in labor compensation in 2010, 2011, and 2012 has been as strong or slightly stronger in the state than in the nation. The state’s different economic structure – primarily its greater reliance on manufacturing – is the primary reason given for both deeper recessions and stronger recoveries in North Carolina compared to the country…

The economic divides in North Carolina likely won’t close in the near future. Economic trends and technologies appear to be favoring metropolitan areas over non-metropolitan regions. As growth continues, metropolitan areas will likely expand their geographic scope – hence, counties designated as metropolitan will likely increase in the future. Challenges will persist for bringing
economic growth to all regions of North Carolina.

Here are Dr. Walden’s forecasts for national, statewide and metropolitan unemployment.

WaldenUnempForecast0613

Analysis Roundup for November 21, 2012

Watch the skies… “gobble, gobble”

Wells Fargo Economics
Leading Indicators Continue Slow Growth Trend

The national index of Leading Economic Indicators (LEI), updated earlier today, only increased 0.2% for October, indicating continued slow growth.

The six-month annualized rate of change in the LEI has
weakened since the start of the year, but remains well above the
negative 3.5 percent rate which often signals recession…

After the interest rate spread, the next largest contribution was
the Leading Credit Index, followed by first-time claims for
unemployment insurance. As fewer people file for jobless
benefits, this component pushes LEI higher.

 

BLS/NC Employment Security
October Sees Continued, Slow Employment Growth

Total Employment in North Carolina increased by nearly 44,000 in October, according to last week’s release of seasonally adjusted employment and unemployment data. The adjusted unemployment rate declined from 9.6% to 9.3%. Since last October, the state has gained a little more than 95,000 jobs.

With respect to nonfarm payrolls (more accurate depiction of permanent workforce), North Carolina only saw an increase of 8,000 jobs in October, all the result of private sector employment growth (+8,900). Since last October, total nonfarm payrolls have grown by 35,700, with private sector growth of 40,000. This means that there have been some employment losses in the public sector, reflecting the need for state agencies and local governments to reduce their workforces in response to permanent fiscal challenges.

 

Overall and private payrolls still remain more than 6% below pre-recession high levels.

Wells Fargo Economics
November Outlook focuses Globally

This month’s video outlook from Wells Fargo Economics Group provides further analysis on current global economic conditions and how they are influencing conditions here in the US. This month’s outlook host, Wells Fargo Economist Michael Brown, will present an Economic Update during the Winter 2012 NCLGBA Conference in Concord on December 7th.

NCSU/Dr. Michael Walden
NC Leading Indicators Improve a Little

Dr. Walden’s Index of Leading Economic Indicators in North Carolina did show a slight increase for September (+0.2%), ending four consecutive months of decline. All of the measures incorporated into the index showed improvement except building permits, which fell by 25%.

Compared to a year ago, the overall index is up 2.4%, with all categories except personal earnings showing improvement.

Wells Fargo/Modeled Behavior
October Home Sales Continue Market Improvement Trend

2012 has been a good year for the housing market, compared to where its position since the start of the last recession. Existing sales continued to improve in October, volume increasing 2.1% to an annual rate of 4.79 million units.

In a blog post, UNC School of Government Economist Karl Smith provides some analysis on the appearance of growth in housing starts, a prediction he discussed during his presentation at the Winter 2011 NCLGBA Conference. If trends pick up in a manner consistent with his original prediction (which he admits anticipated housing growth sooner in 2012 than what actually took place), overall economic activity might look better in 2013.

Finviz/Gas Buddy
Oil Prices Rise with Middle East Tension, Gas Prices Slide Little More

Some parts of NC are seeing retail prices for Regular Unleaded below $3.20/Gallon this week. Crude prices did go above $90/bbl this week as a result of hostilities initiated by terrorists in Gaza against Israel, creating concern for a prolonged conflict and potential supply disruptions. Weak demand, however, does limit the impact of this developing situation, especially here in the US.

Articles of Interest

Philadelphia Fed – November 2012 Business Outlook Survey

Firms responding to the November Business Outlook Survey reported declines in business activity this month following the disruptive effects of Hurricane Sandy on the region. The survey’s indicators for general activity, which had shown improvement in October, fell back into negative territory this month. Firms reported slight declines in shipments, employment, and hours worked. Indicators for the firms’ expectations over the next six months were near their levels in the previous month, but expectations for future employment and capital spending have weakened in the last two months.

WSJ – Investment Falls Off a Cliff


Forbes – The Entrepreneurs of Plymouth Rock

WITN – Computer Frozen, Message Says You’re Under FBI Investigation

GovLoop – Either Way a Fiscal Cliff

TBJ – Top 7 Emerging Trends in Real Estate

Bloomberg – Hospital Medicare Cash Lures Doctors as Costs Increase

St. Louis Fed – Price Level Targeting… The Fed Has It About Right(?)

Census – Facts for Features: Thanksgiving Day!

Have a Happy, Safe and Enjoyable Thanksgiving Holiday!

 

Analysis Roundup: November 2, 2012

Wells Fargo Economics Group
NC Outlook shows “downshift”

Thursday evening, Wells Fargo Economics Group released their latest North Carolina Outlook. Their analysis points to how global downturn and uncertainty over the pending Federal “fiscal cliff” put negative pressure on economic activity within the state this year, as well as create potential decline going into 2013.

Metro-specific analysis is also included in the Outlook for Asheville, Charlotte, Raleigh, Greensboro and Winston-Salem.

Click Here for the NCLGBA Post & Access to the Outlook

National Retail Federation/Wells Fargo/NCLGBA
2012 Holiday Spending Growth Predicted

The National Retail Federation is predicting 4.1% annual growth in retail sales during the 2012 holiday season (November-December), while Wells Fargo also forecasts growth at 3.8%. While below last year’s 5.6% growth rate, it is still above the 3.1% rate reflecting the 10-year average.

Click Here for the NCLGBA Post on 2012 Holiday Sales

Bureau of Labor Statistics
National Workforce Gains 171,000 Jobs

Today, the BLS reported a 7.9% seasonally-adjusted national unemployment rate for October 2012, slightly above last month’s 7.8% rate. Nonfarm payroll increased 171,000 in October, with private sector workforce growth of 184,000. Growth in the services sector continued to outpace goods-production (click here for quick overview of sector performance).

Labor force participation remains below 64%. At the October 2011 participate level of 64.1%, unemployment would be 8.3%, with the rate remaining near or above 10% at pre-recession participation levels. Total nonfarm payroll is still more than 4 million jobs less than early 2008, prior to the start of the recession.

Click Here for the BLS Press Release

NC Employment Security/BLS
NC Counties, Metro See September Payroll Gains

95 of 100 North Carolina Counties and all of the State’s Metropolitan Areas saw increases in nonfarm payroll in September. County payroll growth for the month (1.67%) was close to the year-to-year growth rate for September (1.77%), reflecting the ongoing issues North Carolina is having with sustaining increasing in employment.

Metropolitan areas saw average 1-Month job growth of 1.6%, with 12-Month growth clocking in at an average of 2.7%. Rocky Mount, struggling with among the highest unemployment rates for NC Metropolitan Areas, had the strongest 12-Month job growth at 4.4%.

 

Gas Buddy/AAA/WTVD
“Demand Destruction” Helps Bring Gas Prices Down

Among the effects of Superstorm Sandy, North Carolina residents are noticing another significant drop in gas prices. This is due to the fact that while the storm did not disrupt national gasoline refinery or pipeline activity, the devastation and loss of end delivery infrastructure in the Northeast has created temporary “demand destruction” forcing prices to come down in other areas.

For a better explanation, check out this interview with NC State Economist, Dr. Michael Walden, aired Thursday night:

In the past week, the state average for unleaded as dropped 2.5%, and pump prices in many locations today are less than $3.30/gallon.

Since climbing to over $3.80/gallon shortly after Labor Day, the NC state average has dropped nearly 14%. In most metro areas, according to AAA, prices today are at or slightly above one year ago, though the state average is 21% higher than 2 years ago, reflecting considerable increases in gas prices and the impact felt on local budgets.

Training Opportunities

Next Wednesday, November 7th, 1PM ET – Unbalanced Mayhem: Trends, Challenges & Failures in Local Government Budgeting (Webinar Hosted by American Society for Public Administration & Association for Budgeting & Financial Management)

Presented by Kenneth Hunter, City of Rocky Mount, North Carolina

Across the country, local governments are struggling with fiscal pressures created by ongoing economic turmoil and its impact on revenues, expenditures and citizen quality of life. This presentation will examine specific challenges municipalities and counties encounter when developing annual budgets and how they impact local policy decisions with respect to personnel, capital, taxes and other facets of public administration. Click Here for Registration Info.

November 13th-15th – Intermediate Purchasing Seminar (UNC School of Government)

Click Here for More Info & To Register

Friday, November 16th – Positive Problem Solving (UNC School of Government)

Facilitating positive change is the focus of this one-day leadership development workshop for public staff and elected officials who are interested in involving others, building on current assets, and engaging in joint problem-solving.

The course provides an opportunity for significant interaction with instructors and the chance to apply the course content to real-time work scenarios in class.

Click Here for More Info & To Register

Wednesday, November 28th, 1PM ET – Michigan’s Emergency Manager Law:  Fiscal Fix or Loss of Local Democracy? (Webinar Hosted by American Society for Public Administration & Association for Budgeting & Financial Management)

This webinar discusses the Michigan Emergency Law (EM law), passed in 2011. It is considered the most aggressive attempt by a state to modify and reign in local democracy in an attempt to solve a serious fiscal crisis.  Most states take an approach where local officials are required to undertake certain actions in order to benefit from state support.  Other states insert a financial control board which has the power to oversee city operations and potentially veto certain local decisions.  Few states have implemented an approach that completely removes local decision making and local democracy.  The question arises as the justification for such extreme action. Click Here for Registration Info.

Thursday, November 29th – Accounting & Auditing Update (UNC School of Government)

Presented by Greg Allison

This one-day course will focus on new and emerging governmental accounting and financial reporting requirements. Recent pronouncements and exposure drafts of the Governmental Accounting Standards Board (GASB) will be highlighted, as will the GASB’s technical agenda. (8 Hours CPE)

Program Topics:

  • Overview of current GASB projects related to pension accounting
  • Changes to the reporting of certain assets and liabilities
  • Accounting and financial reporting requirements of GASB Statement No. 54 and other recent statements
  • Highlights of the GASB’s new Comprehensive Implementation Guide
  • Common accounting and financial reporting problems

Click Here for More Info & To Register

Links of Interest

Economic Snapshot – Federal Reserve Bank of Richmond (Includes North Carolina, Released Today)

ASPA National Blog – New Skills for Complex Times

Mercatus – Pensions in Peril

Census Bureau – New Findings on Metropolitan and Micropolitan America and Change Between 2000 and 2010

Wells Fargo Economics Group – An Early Look at the Impact of Hurricane Sandy

CREC – Regional Cluster Analysis – North Carolina’s Eastern Region (Industrial Economic Development)

Charlotte Business Journal – Piedmont Natural Gas Rates Bump Up November 1st

Charlotte Business Journal – Simon says only one outlet center will get built (in Charlotte)

Wells Fargo Economics Group – Fed Maintains Weak Growth, Low Inflation Outlook (Upholds justification for continued quantitative easing)

PNC Economic Outlook Survey, Fall 2012

WRAL – Consumer Confidence Continues Improvement

Durham Herald-Sun – Chapel Hill weighs trash options

WTVD – Feds provide funding to repair Outer Banks roads damaged by Sandy

Analysis Roundup for October 5, 2012

Here’s the latest collection of topics discussed in economic reports of note from financial institutions and government agencies.

BLS/NC Employment Security
Employment Picture Differentiate Across NC Counties

Last Friday, NC Employment Security and the US Bureau of Labor Statistics provided county-level updates for total employment and unemployment rates. 80 counties within the state experienced a decrease in total employment, while 73 saw a decrease in their unemployment rate. Reduced labor force participation within the working age population, caused in part by terminations of summer employment, attributed to this contrast in results.

BLS
National Employment Improves a Little in September

Total nonfarm employment growth for September (Seasonally Adjusted) was 114,000 nationwide. Because of this and adjusted improvements to job growth reported in July and August, the national unemployment rate was reduced to 7.8%, its first sub-8% reporting since January 2009.

National employment participation continues to lag, though up slightly in September to 63.6% of the working age population. Since last September, the total labor force (those working or looking for work) has only increased 827,000, while the working age population has increased 3.7 million. If labor force participation was consistent with September 2011 (a distressing 64.1%, compared to a pre-recession average of 66% to 67%), the unemployment rate would be 8.5%.

On the bright side, since January 2011, private sector nonfarm employment has grown nationally by nearly 3.3 million.

North Carolina unemployment, as of August 2012, still remains among the highest rates in the country, and more than a full percent above the nationwide level.

ADP
National Job Growth Remains Subdued

The National Employment Report provided by payroll processor ADP (released today) shows US nonfarm private employment growing by 162,000 last month (seasonally-adjusted). Job growth for July and August were also revised downward by about 9%-10% per month.

About 89% of these new jobs (148,000) are in the service sector, while the remainder are in goods production. 50% of total reported job creation was with small businesses with less than 50 employees.

Dr. Walden
September NC Leading Indicator Index Dropped 0.8%

For the third month in a row, the North Carolina Leading Economic Indicator Index declined, this time falling 0.8% due to declining manufacturing and building activity.

NC Treasurer
New Website, e-Newsletter Launched

North Carolina State Treasurer Janet Cowell recently-released a newly-designed website, along with a monthly e-newsletter.

The October issue of the newsletter, published today, features information on the Treasurer Office’s investigation of LIBOR Rate manipulation and State Pension Fund performance.

For the 2011-12 Fiscal Year, the Pension Fund achieved 2.21% growth, declining 1.23 during the second quarter of calendar year 2012. Recent losses were concentrated in global equity investments, while securities, real estate and private equity holdings performed well.

Click here to sign-up for Treasurer Cowell’s e-newsletter.

Wells Fargo Economics Group
October 5th Weekly Commentary Highlights

  • September job growth met expectations, but adjusted improvement for summer was unexpected;
  • Economic activity in Europe and China remains sluggish;
  • Interest Rates should remain low as a result of QE3;
  • Low interest rates should have positive influence on car and truck sales

GasBuddy/FinViz
Oil below $90, Unleaded below $3.70

Despite tension in the Middle East, crude oil futures continued to slide, though they remain prone to intermittent volatility due to mixed economic signals. Whether or not employment growth is a sure thing in the US, continued economic slowdown in Europe and China is putting strong downward pressure on crude in comparison to its near-$100/bbl position in late-summer.

 

 

As for gasoline, we’re starting to see some relief, with the State average dropping below $3.70/gallon this week.

 

At the same time, North Carolina prices remain closer to the national average, indicating a peak price situation within the state itself.

QE3 may also play a role in keeping gasoline prices high, especially if greater inflation kicks in. Overall, gasoline prices not only significantly impact local government budgets, but they also have a large influence on disposable personal income. Higher fuel prices in August contributed to an increase in the level of total US retail sales, a situation where greater spending does not necessarily reflect improved economic activity.

Worth Checking Out

Here are some articles worth taking a look at involving NC local governments, or possible strategies for local budgeting and finance:

Wilmington Star News: Industry seeks 30% increase in homeowners insurance premiums for beaches, inland

Triad Business Journal: Bank of North Carolina awarded SBA “preferred lender” status

Triangle Business Journal: Wake OKs changes to make RTP more urban

ASPA Blog: Management Lessons from the Haul Road

NCDOT: Economic Assessment for I-95 Improvements Begins

 

Walden offers Economic Insight; forecasts “Better Growth” for NC

Dr. Michael Walden, William Neal Reynolds Professor and North Carolina Cooperative Extension economist in the Department of Agricultural and Resource Economics of N.C. State University’s College of Agriculture and Life Sciences, provided a comprehensive overview of the national and state economies during the final session of the Summer 2012 NCLGBA Conference on July 27th in Wilmington.

Dr. Walden’s presentation and forecast presented attendees with a chance to learn about key structural issues shaping transformation for business, industry and consumer activity throughout North Carolina and the rest of the country. Walden’s analysis included a better-than-average evaluation of the disparity of the current recovery, with respect to NC and the rest of the country as well as between localities within the state.

Significant portions of Dr. Walden’s presentation were recorded and can be watched in the embed below, or at this page on YouTube.

Dr. Walden forecasts that US GDP will grow between 2.2% and 2.5% for 2012, while national unemployment hovering around 8%. In North Carolina, he anticipated job growth of approximately 60,000 through the end of the current year, with statewide unemployment closing the year near 9.2%.

Walden’s presentation included a conversation on the differences between recent economic fortunes at the state and national levels. Walden attributed some of North Carolina’s more prolonged recession, at least from the perspective of unemployment, on the State’s reliance on manufacturing.

These same explanations were recently chronicled in an online column by the veteran and respected economist. Walden’s piece also provides deeper analysis of some statewide performance metrics tied to employee compensation:

The income per person numbers, generally referred to as “per capita income,” are derived by taking all income received by persons in the state and dividing by the population. Included in the income numbers will be money earned from working and income from pensions and Social Security as well as any funds received from public assistance. Also, the population includes everyone: working adults, retired persons and children.

Therefore, it is incorrect to interpret the per capita income calculation as the average amount a person earns from working. Fortunately, we do have those numbers, and they show a different trend for North Carolina. When we compare the average compensation (which includes earnings plus the value of any benefits like health insurance) per worker in North Carolina to the same measure for the nation, two results are seen.

Walden also maintains the North Carolina State University Index of Leading Economic Indicators (LEI). His most recently analysis through July 2012 suggests continued slowdown in the statewide economy, driven in part to consumer frugality facilitated by their continued deleveraging, an issue he addressed in his presentation to NCLGBA and best described by this slide from his presentation.

Click Here for the PowerPoint of Dr. Walden’s Summer 2012 Economic Forecast

Click Here for his Latest Seasonable Economic Update (Summer 2012)

NC Leading Indicators Index Drops in September

NC Leading Indicators Index Drops in September

One new measure of economic health for the Tar Heel State is the Index of North Carolina Leading Economic Indicators, developed and published monthly by N.C. State University Economist, Dr. Michael Walden.

In its most recent report, updated for September, the leading indicator index fell 0.8% compared to August. The index was near even (+0.1%) with its level in September 2009.

The index include five components, some of which showed significant volatility during September:

  • Economic Cycle Research Institute Weekly Leading Index: +1.0% for 1-month, -4.3% for 1-year
  • Statewide Initial Unemployment Claims: -3.6% for 1-month, -30% for 1-year
  • Statewide Building Permits: -15.2% for 1-month, -32% for 1-year
  • Average Weekly Hours, NC Manufacturing Jobs: +0.2% for 1-month, +3.3% for 1-year
  • Average Weekly Earnings, NC Manufacturing Jobs: -2.7% for 1-month, +2.4% for 1-year

Leading indicators are often used to predict economic activity within the upcoming 6 months. While Dr. Walden’s index has shown a downward trend since April 2010, he does not declare this as the on-set of another recession within the state.

Click here to access the October 2010 NCLEI Report (PDF)

What NC Economists are Saying

What NC Economists are Saying

Three of the better-known economists in North Carolina commented on the current state of the economy late this week, in anticipation and response to today’s BLS unemployment report for August. Here is a sample what they posted on the LocalTechWire blog:

Dr. Michael Unger, director of the Philosophy, Politics, and Economics Program at Duke University, offers some historic insight into the period some are trying to compare the present to, the mid-1930’s.

Dr. Michael Walden, William Neal Reynolds Distinguished Professor for the Department of Agricultural and Resource Economics at North Carolina State University, suggests the recent growth is slowing down considerably.

Finally, Dr. James Kleckley, director of the Bureau of Business Research in the College of Business at East Carolina University, focuses his attention on the job front, and how its lack of growth is an even bigger issue than the economy as a whole.