While it’s hard to find encouraging economic news these days amid rising unemployment rates, plummeting state and local revenue and school system and local government cutbacks, this week brought a forecast worth noting for two reasons: It sees an end to our current misery, and it comes from a highly respected North Carolina economist.
Actually, it may be overstating the case somewhat to say that UNC Charlotte’s John Connaughton sees an end to this recession’s deep pain. More likely, he sees the beginning of the end. In the most recent edition of the UNC-Charlotte Economic Forecast, released Tuesday, Connaughton’s analysis suggests the “North Carolina economy should begin a modest recovery during the second half of 2009.”
Note the words “modest” and “second half.” In other words, don’t blow your cash reserves on caviar and a weekend jaunt to Vegas.
The turnaround is still at least a quarter away, Connaughton’s widely followed forecast says, and it won’t bring a dramatic upswing. The forecast anticipates N.C. economic growth of about 1.8 percent in the third quarter, rising to 2 percent by the end of the year. And, even more relevant for laid-off workers looking for new jobs, the employment figures will improve more slowly than the overall economy. Even as gross state product begins to grow again, probably in the third quarter of this year, unemployment will continue to rise. That’s somber news for Rowan, which had a 9.3 percent jobless rate in December and will almost certainly see an increase in that number when the January figures are released, perhaps later today. The UNC forecast projects double-digit unemployment for the state as a whole, with job losses spread across most economic sectors.
Hardly cause to break out the champagne, obviously (and who could afford it these days, anyhow?). But for North Carolinians, Connaughton’s report points to the answer to these nagging questions: How much worse will this get, and how much longer will it last?
Connaughton’s answers: We’ve weathered the worst, and some glimmers of economic sunshine should break through over the summer as prelude to stronger recovery in 2010. Of course, the real-world gauge of recovery will be when “help wanted” notices start replacing pink slips, and consumers are confident enough to start spending again. We’re not there yet ó and economic forecasts can be as hazy as any other form of prognostication. But even if a significant rebound is still months away, Connaughton’s forecast helps bolster confidence that relief is at least visible on the horizon.
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You can link to the UNC-Charlotte Economic Forecast through Connaughton’s Web page, www.belkcollege.uncc.edu/jec/