Is the state's economy turning the corner?
Published March 19, 2014
Editorial by Jacksonville Daily News, March 17, 2014.
For the first time in a long time, signs for the economy in North Carolina are sort of good.
That was the word last week from John Connaughton, an economist at the University of North Carolina Charlotte. He predicted that state unemployment numbers would continue to drop, construction projects would grow in number and that spending should increase among state residents.
“This is really sort of the first year since the recovery began that all of our sectors are going to show growth,” he said. “2014 has the potential to be a really good year.”
We hope he’s right. The plain truth is, we’ve been fooled before.
The slow road to economic recovery for North Carolina and — and nationwide for that matter — since the market-fueled collapse has been filled with potholes, traffic jams and fender-benders. One week leading economic indicators point in a positive direction, the next, the numbers head the opposite way.
It’s frustrating to say the least.
The biggest positive that Connaughton sees, though, is in the ongoing decline in unemployment in North Carolina. The state’s jobless rate was 6.9 percent in December. For the state, Connaughton anticipates it falling below 6 percent this year.
That’s perhaps the best possible scenario when it comes to how much consumers are willing to spend on items beyond day-to-day living expenses. When consumers feel that the economy is improving, they make big-ticket repairs to their homes or buy new ones. They browse on car lots or shop for new appliances. As housing prices go up and interest rates remain manageable, then stagnant wages grow. If all those things occur, the road to recovery is suddenly paved with fresh asphalt.
“When you build a couple of hundred-thousand-dollar homes, you buy a lot of stuff that goes into that,” Connaughton said.
In addition, Connaughton said he expects all 15 of the state’s economic sectors to show growth this year with farming on top.
While all of that sounds just peachy, we will also note that the nation’s February job creation figures released last week were almost equally pessimistic. New jobs for the month numbered a middling 175,000, but the three-month average including January and normally vigorous December activity was a pale 121,000. The unemployment rate was 6.7 percent, masking a 203,000-person increase in long-term joblessness among Americans, a number now standing at 3.8 million.
Whom to believe?
We’ll see.
