“Despite everything that’s going on Washington (and) everything that’s yet to go on…the underlying fundamentals of the economy are dramatically improved,” says Michael Walden, professor of economics at NC State. Walden delivered the keynote address Wednesday at the Chapel Hill-Carrboro Chamber of Commerce’s annual Economic Outlook Briefing.
The U.S. economy lost nine million jobs and six percent of its GDP during the “great recession” of 2008-09, but Walden says things have turned around on both fronts. The national gross domestic product is now above pre-recession levels—and the country has regained about six million new jobs, a trend Walden says is likely to continue.
“We had a very good jobs report last week, and I think that’s going to be more the standard rather than the exception,” he says.
In fact, Walden says he expects the country to add about 250,000 new jobs each month for the rest of the year—three million new jobs in the next 12 months, enough to bring the number of jobs in the U.S. back to where it was in January of 2008.
The recession hit especially hard here in North Carolina, where the unemployment rate spiked into double digits for nearly three years. Walden says given the history of past economic slumps, that was actually to be expected.
“We have a bumpier economic ride,” he says. “We tend to have deeper recessions (because) we’re still more of a manufacturing state…and manufacturers always take it on the chin during recessions, because people can postpone buying manufacturing products…
“But the upside of our bumpy ride is (that) we tend to have better recoveries.”
North Carolina hasn’t seen that better recovery yet, Walden says—we’ve added jobs at about the same rate as the nation as a whole—but Walden says that’s going to change, beginning this year.
“We’re going to see a big boost to North Carolina’s economy, starting this year,” he says. “In the next five years, (we’ll see) at least 400,000 net new jobs coming to North Carolina…(with the) unemployment rate at the end of five years down near six percent.”
Walden says he projects North Carolina to add 90,000 new jobs in 2013 alone, up from 65,000 last year. That would drop the state’s unemployment rate to 8.2 percent by year’s end.
Walden’s predictions are optimistic, but even he says the employment picture isn’t entirely rosy: the state and the country are gaining jobs, but many of those are low-paying jobs in the service sector—a sign of what Walden calls a “dumbbell economy.”
“(That means) fast job growth on the high end, in terms of high skills (and) high pay, but also fast growth on the low end–low skills (and) low pay,” he says. “A lot of those middle income jobs have been replaced by technology.”
Still, Walden says the overall economic outlook is strong, locally as well as nationally—and he says the Triangle is poised to be one of the fastest-growing regions in the state in the next five years.
If that prediction holds, it can’t come too soon for local businesses. Chamber president Aaron Nelson says in the last year, with the economy still sluggish and money still tight, more local business owners have reported feeling the pressure of the recession—in spite of the recovery on paper.