Analysis Brief – January 10, 2014


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 Brief – September 16, 2013

Some NCLGBA Business to start off:

Charts, Charts & More Charts

Dr. Walden’s Leading Indicator Report shows Positive Signs

“The NCSU INDEX OF NORTH CAROLINA LEADING ECONOMIC INDICATORS (the “Index”), a forecast of the economy’s direction four to six months ahead, moved in July to its highest level since early 2008. The gain was driven by a substantial drop in initial jobless claims and a modest improvement in the national leading index. All other components of the Index backtracked slightly.”


 Connaughton also sees growth in 2013 for US, NC

UNC-Charlotte economist, Dr. John Connaughton, presented his latest economic forecast on September 10th. Among his predictions:

  • 2.1% growth in Gross State Product (GSP) for 2013, below the 2.7% pace in 2012, though growth will be seen across all 15 economic sectors (industries)
  • 2014 GSP Growth projected to be 3.3%, returning to long-term economic average
  • Agriculture will grow 3.5% in 2013, then 16.5% in 2014
  • North Carolina will see net job growth of 53,100 in 2013, additional net 86,000 growth in 2014
  • Growth pace to accelerate through second half of this year due to increased consumer confidence and improvement in housing market
  • Hospitality and Leisure Services only expected to grow 1.5% in 2013, 1.0% in 2014
  • Despite job growth, unemployment will remain stagnant at 9.0% for 2013 and 2014, due in part to increased labor force participation and lack of substantial growth

 Expansion to remain Steady, Slow

Wells Fargo’s latest outlooks for 2014 and 2015 remain consistent with their forecast for slow, steady growth, with pace similar to the prior four years of overall global economic expansion.

Gas Prices Remain Steady despite Oil Climb

Retail gasoline prices did pick up a little towards the summer, and oil prices have increased recently due to unrest in Syria and elsewhere in the Middle East. Overall, national and state retail averages remain more than 10% down compared to a year ago.


Form a longer time horizon, consumers and local governments have seen an annual rate of gasoline price inflation of ~15% or so over the past 7 years.

Other Articles of Note

Academic to lead NC rural economic development (BusinessWeek)

The Rise of Cities and the Mayors who run Them (Governing)

How to Find Time for that Important Project (Michael Hyatt)

Why Generation Y Yuppies are Unhappy (Huffington Post)

The gas tax is running out of gas (News & Observer)

Who will pay for Medicare? (Harvard School of Public Health)

Analysis Brief – August 22, 2013

Job Announcements on NCLGBA Career Gateway

Finance Director – Town Of Selma (Closes 9/6/13)
Finance Director – City Of Oxford (Open Until Filled)

End of Session Legislative Updates Scheduled/Available

The 2013 session of the North Carolina General Assembly has concluded, and our supporting organizations have had the time to review passed and adopted legislation and provide comprehensive overviews of how the session impacted county and municipal governments.

Click Here for NC League of Municipalities’ End of 2013 Session Bulletin

Click Here for NC Association of County Commissioners 2013 Legislative Session Report

The UNC School of Government will present two webinars, scheduled for August 29th and September 5th, providing a comprehensive review of the session.

Both sessions start at 10:00 a.m. and are scheduled to last until 12:30 p.m. Each session is $125/site or individual wanting CPE credit. Both sessions can be purchased for the discounted price of $225. Click here for more information and to register online.

Session 1 Topics – Thursday, August 29th (Click Here to Register)

  • Public health
  • Mental health
  • Social Services
  • Elections
  • Community Planning and development
  • Environment

Session 2 Topics – Thursday, September 5th (Click Here to Register)

  • Local government authority and finance
  • Purchasing and contracting
  • Emergency management
  • Ethics
  • Economic development
  • Property tax
  • Criminal law

Wells Fargo Releases Outlook for North Carolina

Click Here to Download and Read

The report offers a good overview of current trends in the Tar Heel State, along with several key metro areas. Among its findings:

  • As noted many times before, unique characteristics to North Carolina’s economy not only delayed the arrival of the most recent recession, but have also contributed to a delayed recovery in many parts of the state.
  • Real GDP in North Carolina grew 2.7% for 2012, slightly above the national mark (2.5%)

  • Hiring is picking up, especially in the hospitality, information, professional and business services.
  • Unemployment remains high, especially in rural areas, and driven to a bottoming out in manufacturing and construction.
  • Tax reform, especially with respect to reduced individual and corporate income tax rates, should help North Carolina compete for jobs lost in recent years to states neighboring key metropolitan areas.
  • At its worst, housing prices statewide saw a 13.7% drop. Recent gains now put them approximately 5.7% below pre-recession levels, better than the 19% decline still present at the national level.
  • North Carolina is “defying” logic associated with the current global slowdown and achieving strong growth in exports, currently up 5.5% for the year. Growth is centered on China and Mexico, while trade to Canada, the State’s largest partner, has fallen close to 3%.
  • Raleigh’s economy is clearly outpacing most of the rest of the state and country, with respect to both economic activity and employment growth.

NC down nearly 56,000 Jobs since January

July unemployment was reported at 8.9% for the Tar Heel State, up slightly from 8.8% in June. The State lost more than 13,000 in July, and is down almost 56,000 since January. The January 2013 unemployment rate, however, was 9.5%.

Job losses so far are significant, but reductions in the labor force count are even more so, down nearly 80,000 from January. During the same time period last year (January-June 2012), the state labor force grew by nearly 28,000, and years before that saw increases or decreases between around the 20,000 range.

If the labor force in July was equal to its January total (4.776 million), the unemployment rate would be 10.4%.

Need Performance Measurement Training?

UNC School of Government has two workshops coming up of interest to those seeking to enhance their performance measurement skills. Registration for each worskhop is $130/person, and each workshop lasts one day.

Both workshops are taught by Dr. David Ammons,

Friday, September 6th – Performance Measurement 101: Designing Measures in Local Government for Accountability and Results This course fulfills the “Performance Measurement” requirement for North Carolina Budget & Evaluation Certification Program (click here for more information)

This workshop focuses on the fundamentals of performance measurement and the design of measures that strengthen local government performance. Participants will discuss the criteria for a good set of measures, tips for developing or refining performance measures, and the use of standards or benchmarks in performance comparisons.
Friday, October 4th – Practical Analytic Techniques for Local Government  This course fulfills the “Evaluation” requirement for North Carolina Budget & Evaluation Certification Program (click here for more information)
This course focuses on a variety of easy-to-apply analytic techniques and includes examples of successful analysis among local governments. Topics include the use of analysis to consider the need for additional employees, to diagnose work scheduling and routing problems, to make adjustments for the impact of inflation, and to analyze patterns of demand for a service.

“Local Food” interest you?

UNC School of Government, along with the Center for Environmental Farming Systems, will host a special webinar, “Local Food and Local Government,” on Wednesday, September 11th, 10am to 11:30am.

Site cost for the webinar is $125. Click here to register.

What’s the impact of local food? From the USDA:

According to the latest Census of Agriculture, direct sales of food products from farmers to individual consumers rose by nearly 50 percent between 2002 and 2007. Worth an estimated $1 billion in 2005, local food sales grew to $4.8 billion in 2007 and nearly $7 billion last year, according to industry estimates. For nearby businesses in major cities across the U.S., having a farmers market nearby means an average increase in sales of anywhere from $19,000 to $15 million (according to a Marketumbrella research paper published in 2012).

Small Business Sentiment improving, not Great

(Wells Fargo) Wells Fargo’s Small Business Confidence Index rose 9 points in the third quarter to 25, reaching its highest level in five years. Both the present situation and future expectations components of the survey increased during the quarter, but small businesses are clearly more upbeat about future prospects than they are about actual operating results over the past year. The present situation index rose 2 points during the quarter to 4, while expectations climbed 7 points to 21.

Indicators suggest upcoming Growth

(Wells Fargo) The Leading Economic Index (LEI) increased 0.6 percent in July, with broad-based contributions from its underlying components, suggesting sustained growth for the economy. Only two components (capital good orders and average workweek for production workers) were negative.

LEI Contributors 072013

Real Estate Recovery yielding Mixed Results

Overall, the national real estate market is seeing recovery with respect to increased sale prices, reduced listing inventory and foreclosure stock, and increased issuance of permits for both single-family and multi-family construction.

Here’s some highlights from recent reports:

(Wells Fargo) Despite rising mortgage rates, existing home sales posted a better-than-expected 6.5 percent gain in July.  However, inventories rose for the sixth month, but remain at a historically low level. Distressed sales were unchanged.

(Wells Fargo) Housing starts increased 5.9 percent on the month, but all of the gain was in the volatile multifamily component. Single-family starts and permits fell on the month. Although the pullback in single-family starts and permits may be disconcerting, we are not worried… The NAHB/Wells Fargo Homebuilder Index reached its highest level since late 2005. So what is the disconnect? We suspect damp weather in the South continues to be the largest factor in the recent disappointing readings. The recent slowdown, however, suggests we could see some catch-up in construction activity later this year.

Most Realtors will tell you that real estate is primarily dependent on local conditions, meaning recovery activity is likely not to be consistent from place to place.  RealtyTrac found that when evaluating metropolitan areas for their first “Housing Market Recovery Index” report:

“The U.S. housing market has clearly shifted to recovery mode over the past 18 months, with home prices consistently rising and  foreclosures falling closer to pre-housing bubble levels,” said Daren Blomquist, vice president at RealtyTrac. “Still symptoms of the distress that plagued the housing market over the past seven years continue to linger, particularly in the form of a high percentage of underwater borrowers and distressed sales. This lingering distress is creating an uneven pace of recovery across different local markets.”

The report created some disagreement in Wilmington, as the coastal metro area was listed in the “Bottom 20” list with respect to its index score and reflection of a “lagging” market. Local Realtors, however, are not satisfied with the metric:

“While the Wilmington housing market overall is trending up, we acknowledge that challenges towards a full recovery still exist; however, we believe that characterizing our housing market in such a negative light is short sighted and inaccurate,” said WRAR President R. J. Alex in a news release yesterday…In July, homes sales in the Wilmington region were up 18 percent to 628 units sold compared to the same period the year prior. Average home sale prices were also up 4 percent to $244,130, according to data from Wilmington Multiple Listing Service.

Where’s Fuel Going

The last 30 days have seen some decline in gasoline prices, nationally and in North Carolina, with the average dropping about $0.10/gallon.


Compared to a year ago, North Carolina prices are about 27 cents/gallon less (-7.3%), consistent with the national trend. North Carolina is also starting to see a broader discount gap between its average and the National Average, though the border states of South Carolina, Virginia and Tennessee continue to have lower prices (7 to 20 cents/gallon).



The latest short-term outlook from the Energy Information Administration indicates that fuel prices should remain stable through 2014, with crude oil prices falling back some from recent gains.


However, if current unrest in Egypt and elsewhere in the Middle East negatively impacts production activity, or results in the inability to transport product through the Suez Canal, substantial price shocks are highly likely.


Other Items

LGC publishes LGERS Retirement & Investment Disclosure Memo for FY 2013

Employment Security video series on Unemployment Insurance Law changes & implementation (YouTube)

Notes from ASPA’s “Presenting for the Information Age” Webinar (Scribd)

Overview of GASB’s new Pension Reporting Standards (GFOA)

Analysis on Impact of Tax Exemption for Municipal Bond Interest in North Carolina (NACO)

Wells Fargo’s August Economic Outlook (YouTube)

Resources from 2013 Community Development Research Conference (Atlanta Fed)

Interview with Economist John Haltiwanger on various national economic issues (GDP, jobs, growth, etc.) (Richmond Fed Magazine)

LA County changes policy, prevents school bond campaign donors from issuing bonds (LA Times)

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.


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.


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



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.


Vitner suggests US Economy growing “slower,” but not “close to the edge” for recession

Mark Vitner, Senior Economist for Wells Fargo Securities, was interviewed for the firms’ monthly “Economic Outlook” video for August.

His analysis suggests slowing growth for the US Economy, influenced by developing trends of decline in consumer spending, along with uncertainty in Europe and lack of revenue growth in all levels of US government.

Wells Fargo did downgrade their end-of-year forecast for US GDP growth this month to less than 2%.

This video can also be accessed at this link on YouTube. 

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)

PNC hosts 4th Quarter Economic Outlook Webinar August 23rd

PNC Financial Services, which acquired RBC Bank earlier this year, will host an economic outlook webinar on Thursday, August 23rd, 2-3 pm Eastern.

Click Here for Webinar Information & Registration Access


This event will provide perspective on the challenges the national and global economies face over the remainder of 2012

With a presidential election looming and the economy still soft, it can be hard to predict what the fourth quarter will bring. PNC’s economics team provides a baseline forecast for the remainder of the year and addresses issues that could have a major impact, including:

  • Where is the EuroZone headed and how will it affect the U.S. economy?
  • Will Congress back off from the fiscal cliff?
  • What does housing’s modest resurgence mean for the larger economy?
  • Can the economy expect a boost from lower gas prices and lower inflation?

Given recent uncertainty about the overall condition of the economy, the remainder of 2012 possesses the potential for volatility, and could dramatically influence the fiscal condition of state and local governments. This is your opportunity to learn more about the variables in play in order to better prepare staff and leadership, as well as anticipate the need for responsive action.

The webinar will be led by two of PNC’s experienced economists.

Stuart G. Hoffman is senior vice president and chief economist for The PNC Financial Services Group and serves as the principal spokesperson on all economic issues for PNC. Hoffman was recognized as the second most accurate economic and interest rate forecaster for 2006 by USA Today and as the most accurate forecaster for 2004 byBusinessWeek. In addition, he was named one of the top forecasters in the Wall Street Journal economic survey covering the 1988 to 2009 period.

Hoffman joined PNC in 1980 after a six-year tenure with the Federal Reserve Bank of Atlanta. He became vice president and senior economist for PNC in 1987 and was elected senior vice president and chief economist in 1991.

William (Bill) Adams is assistant vice president and senior international economist for The PNC Financial Services Group. His responsibilities include forecasting economic conditions and exchange rates, covering emerging Asia, the European Union, Canada and Latin America. Adams serves as the principal spokesperson on global economic issues for PNC, and frequently presents to PNC clients on the international economic outlook.

Adams joined PNC in July 2011 after serving as resident economist for The Conference Board China Center from 2009 to 2011


Wells Fargo Midyear Economic Update Call next Wednesday, June 27th

The Charlotte-based Wells Fargo Economics Group will host their Midyear Economic Outlook Update next Wednesday, June 27th, at 11am ET. The formal presentation, along with a question and answer session, will last approximately 90 minutes.

Here is a preview of what the call may cover:

As we suspected, the year thus far has been eventful in terms of economic performance and the evolving policy landscape. At the mid-point of the year, the U.S. economy has held on reasonably well, while growth globally — notably in Europe — has slowed substantially. Significant challenges persist to the domestic and global outlook. In particular, fiscal policy challenges may prove to be the highest near-term hurdle to economic growth.

Download Calling Instructions (PDF)

Download Presentation Slides (PDF)

Tar Heel State “Weak” in latest Richmond Fed Snapshot

Tar Heel State “Weak” in latest Richmond Fed Snapshot

North Carolina is part of the Richmond District of the Federal Reserve Bank. Each month, Richmond Fed economists prepare an Economic Snapshot of the district and provide detailed information on each of its states, as well as summaries of MSA performance.

Click here to access the latest Richmond Fed Economic Snapshop, released on October 7, 2011

Summary of the District Overall

  • Performance is “sluggish”
  • Net month-to-month job losses of 7,500 in August, fueled mostly by government employment reductions; total jobs still 50,000 higher compared to last year
  • District unemployment rate is lower than National Average, due in large part to strong performance in Washington, DC MSA (i.e., federal government influence)
  • Business conditions “did not change notably”; new manufacturing orders “fell sharply”
  • New housing permits rose, but new housing construction starts fell
  • Revised personal income estimates (via BEA) show a more significant drop in personal income during the official recession period than thought before. Pre-recession incomes were at a higher per capital level, and the level of decline during the recession was greater as well (revised from about 2.5% to 4%)

Observations on North Carolina

  • Conditions “remained weak in recent months, with mixed conditions in labor and housing markets”
  • State did gain 16,500 jobs in August, with the net made entirely possible by the rehiring of public school teachers (+16,800), Year-to-year total employment is up more than 21,000, while government employment is down 14,700.
  • State unemployment rate is above 10% and is higher than the national and Richmond District rates
  • Housing construction activity is up from recent droughts, still below last year’s (depressed) levels
  • Revised personal income estimates from BEA show a similar trend to the Richmond District as a hole. Unfortunately, while District PCI has already rebounded to eclipse pre-Recession levels, North Carolina PCI is still approximately 2% below full recovery (not including inflation). Overall drop as a result of the recession to per capita income (from highest point to lowest point) was revised from 4.1% to 6.5% (and this does not take into account the impact of inflation.