NCSU Index shows economic pullback in North Carolina :: WRAL.com

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