NCSU Index shows economic pullback in North Carolina
NEWS COVERAGE YOU CAN COUNT ON.
>> WE'VE SEEN MONTHS OF GROWTH
IN THE ECONOMY, BUT NORTH
CAROLINA'S ECONOMY MAY BE
SLOWING DOWN AND NC STATE INDEX
THAT FORECAST THE ECONOMY SHOWS
AN ECONOMIC PULL BACK IN MAY.
THE INDEX TRACKS NATIONAL
INDICATORS, BUILDING PERMITS
MANUFACTURING HOURS AND
EARNINGS AND UNEMPLOYMENT
CLAIMS BUILDING PERMITS ARE
DOWN 14% MONTH OVER MONTH.
AND INITIAL JOBLESS CLAIMS
INCREASED BY MORE THAN 30%.
THESE NUMBERS ARE RAISING
QUESTIONS ABOUT WHETHER THIS
PULLBACK COULD LEAD TO A
RECESSION HAD MAYBE NOT IF,
BUT WHEN. JOINING US NOW TO
TALK ABOUT IT IS NC STATE
ECONOMIST.
>> FORMER NC STATE ECONOMIST
BECAUSE WE KNOW YOU'RE TIRED
AND BUT STILL AUTHOR REPORT
MIKE YOU KNOW, MIKE, THIS IS
THE LARGEST DOWNTURN WE HAVE
SEEN IN MORE THAN A YEAR.
BUT NORTH CAROLINA'S ECONOMY
IS STILL STRONGER THAN IT WAS A
YEAR AGO. SO IS THIS SOMETHING
THAT WE NEED TO WORRY ABOUT?
>> WELL, FIRST, THANKS FOR
HAVING ME ON THE IT IS
SOMETHING WE SHOULD WORRY
ABOUT. I DEVELOPED THIS INDEX
OVER A DECADE AGO TO TRY TO
GIVE US SOME INSIGHT INTO WHERE
THE ECONOMY IS GOING NUTS.
IT'S A LEADING INDICATOR INDEX
ABRY MUCH LIKE WHAT WE HAVE
AT THE NATIONAL LEVEL AND IN
THE THE MEASURE OF THIS, WHICH
WAS FORM A DATA WE DID HAVE A
VERY LARGE IN FACT, THE BIGGEST
DECLINE OVER A YEAR AND IF THIS
INDEX IS TELLING US WHAT WE
THINK IT SHOULD TELL US WHAT
THAT TRANSLATES INTO AS A MUCH
SLOWER ECONOMY FOR NORTH
CAROLINA. 4 TO 6 MONTHS AHEAD.
DOESN'T MEAN A RECESSION, NOT
NECESSARILY, BUT IT DOES
SUGGEST A SLOWER ECONOMY.
>> WELL, REALLY, WE'RE ALREADY
SEEING THAT, TOO, MIGHT BECAUSE
WE'VE SEEN THE HOUSING MARKET
EXPLODE IN THE TRIAL LAST YEAR.
BUT NOW WE'RE SEEING THE
BUILDING PERMIT NUMBERS SLOWING
DOWN. HOW MUCH OF THAT IS
INFLUENCED BY THOSE RISE IN
INTEREST RATES AND SHOULD
PEOPLE LOOKING TO BUY OR BUILD
OR SELL A HOME, BE CONCERNED?
>> IT'S ALL ABOUT THE INTEREST
RATES AND THE FEDERAL RESERVE
ACTUALLY IS BEHIND THIS AND
THEY WANT THIS TO HAPPEN.
THEY WANT THE ECONOMY TO SLOW
DOWN ALL PARTS OF THE YES.
IF YOU ARE LOOKING TO BUY A
HOUSE AND YOU USE LOCKED IN ON
THE HOUSE, YOU QUALIFY, GO
AHEAD AND BORROW THE MONEY NOW
BECAUSE I THINK INTEREST RATES
ARE GOING TO GO UP MUCH MORE.
THE FED IS NOT DONE. CONTRARY
WISE, IF YOU'RE TRYING TO SELL
A HOUSE YOU MAY WANT TO HOLD
OFF UNTIL ALL THIS SETTLES
DOWN. SO THE THE HOUSING MARKET
WILL DEFINITELY BE IMPACTED BY
WHAT'S GOING ON IN WASHINGTON,
VIS-A-VIS THE FIGHT AGAINST
INFLATION.
>> YOU HAVE BEEN STUDYING THIS
AREA FOR SUCH A LONG TIME.
YOU KNOW, USUALLY WHEN IT COMES
TO JOBS IN OUR AREA, WE ARE
REALLY BOOMING. BUT WE'RE NOW
SEEING THOSE RISING
UNEMPLOYMENT NUMBERS THAT SHOW
THAT MAY BE THAT NOT THAT MAY
NOT BE THE CASE GOING FORWARD,
THAT THOSE THOSE JOBS MAY BE
FEWER AND FARTHER TO COME.
SO IS THIS A SIGN OF WHAT WE
SHOULD EXPECT IN THE FUTURE?
>> BUT IT IS AND YOU'RE
ACTUALLY WRITE THE TRIANGLE.
AND IN FACT, NORTH CAROLINA AS
A WHOLE AS HAS BEEN AN ECONOMY
THAT'S BEEN GROWING FASTER THAN
THE NATION. BUT WE ARE PART
OF THE NATIONAL ECONOMY.
AND SO IF WE DO HAVE A NATIONAL
RECESSION, RECESSIONS ARE
TURNED TO BE A NATIONAL.
WE WILL FEEL THE IMPACT NOW
HOPEFULLY WILL NOT FEEL THE
IMPACT AS BADLY HERE IN NORTH
CAROLINA AND IN THE TRIANGLE.
BUT WE WILL FEEL THE IMPACT.
WE WILL LIKELY SEE A RISE, FOR
EXAMPLE, HIM ON EMPLOYMENT
BECAUSE WE ARE INTERCONNECTED
WITH EVERYTHING ELSE AND SO,
YES, I WOULD. I ADVISE ALL
EVERYONE I TALKED TO BUSINESS
GROUPS, ET CETERA, HAND IN YOUR
BACK POCKET. A PLAN FOR YOUR
IF WE DO HAVE A RECESSION
BECAUSE I THINK THERE'S THERE'S
PROBABLY A 50, 50 CHANCE RIGHT
NOW. THEY WERE GOING TO HAVE A
RECESSION LATER THIS YEAR.
AND WE'RE IN THE NEXT YEAR.
>> SO WHAT WOULD BE THE
BENCHMARK TO CONSIDER THAT THE
ECONOMY IS IN A RECESSION AND
HOW CLOSE DO YOU THINK WE ARE?
TO THAT POINT? I KNOW YOU SAID
IT'S A 50, 50 CHANCE WE'RE
GOING TO GET THERE.
>> OF RECESSIONS ARE NOT
OFFICIALLY DECLARED UNTIL WHILE
AFTER THEY BEGIN AND ONE WHAT
THEY FOCUS ON TO SOMETHING
CALLED GROSS TO MANAGE NATIONAL
PRODUCT, WHICH IS SIMPLY THE
HABIT OF EVERYTHING WE PRODUCE
GOODS AND SERVICES IN THE
ECONOMY. YOU CAN GET FOR
EXAMPLE, ATLANTA FEDERAL
RESERVE IS A VERY GOOD PLACE
TO GO. THEY TRACKED THIS
MONTHLY. SO I'D RECOMMEND THAT
TO GET A HEADS UP. BUT I THINK
PEOPLE IN GENERAL FEEL IF A
RECESSION IS COMING, THOUGH,
WILL SAY THAT HIRING AND HANDS
ARE NOT THERE. THEY'LL SEE THAT
MAY BE A BUSINESS IS POSTPONING
EXPANSION. THEY MAY BE WHERE WE
WILL HAVE THEIR HOURS CUT BACK.
SO I THERE ARE A LOT OF
INDICATORS YOU CAN LOOK AT.
AND I THINK WE'LL KNOW IF
THINGS SLOW. AND OF COURSE,
OF A SLOW DRAMATICALLY WILL
KNOW IF IT'S A RECESSION.
>> LIKE YOU SAID, IT'S IT'S
ALWAYS WE'VE GOT A LOOK BACK TO
SEE IF THAT ACTUALLY HAPPENED.
I DON'T ENVY YOU. YOUR JOB IS
NOT EASY, BUT MIKE, WAS YOU.
YOU ALWAYS DO SUCH A GREAT JOB
OF EXPLAINING THIS. WE REALLY