CHAPEL HILL – The national and local economy got off to a slow start this year, but economist Mark Vitner of Wells Fargo says he still expects 2014 to be a strong year overall.
“Most of the numbers that we’re going to see (from February) are likely to be disappointing because the time that those reports are put together, the time period that they reference, is right about the time that we had the big snowstorm,” he said Thursday. “But I think that’s all pretty much a temporary disruption.”
Vitner delivered the keynote address at the Chapel Hill-Carrboro Chamber of Commerce’s 2014 Economic Outlook Briefing, Thursday morning at the Sheraton Chapel Hill.
Vitner based his optimism on a number of positive developments—including reduced uncertainty following the federal budget deal; rapid growth in the nation’s energy and tech sectors; and an expected drop in the unemployment rate, down below six percent by the end of the year. He said he expects the improved economy will spur the Fed to raise interest rates sometime in 2015 (though not before).
Even so, Vitner says economic growth will be slower in the future than it has been in the past. Prior to the recession, he says, the U.S. economy grew at an average rate of 3.3 percent per year—but that was sustained in part by heavy debt. Now that credit’s harder to come by, Vitner says growth won’t be quite that fast: he predicts the economy will grow by 2.4 percent in 2014, up about half a point from last year, and by about 3.1 percent in 2015 and 2016.
If that prediction holds, Vitner says we’ll be doing pretty well.
“We think that 2014, 2015 and 2016 will be the three best years of this decade,” he said Thursday.
And with the economy returning to normal, consumer confidence too is up from previous years. But Vitner says people aren’t necessarily feeling more optimistic, just less pessimistic: fewer people say the economy is “bad,” but there’s been no change in the number of people who are ready to say the economy is “good.”
“I kind of sum that out as ‘less bad is good – but more good would be better,'” he quipped. “That’s kind of where the economy is right now.”
Vitner is a Charlotte-based managing director and senior economist for Wells Fargo. More than 100 people were in attendance for his speech on Thursday.