RALEIGH – North Carolina’s economy is cooling and that could be a “slowdown” in coming months, says North Carolina State University economist Dr. Mike Walden.
But he does not foresee a recession as of yet.
Citing his monthly calcuation of economic data that make up the NCSU Index of NC Leading Economic Indicators, Walden reported Thursday that the Index has declined in five of the past seven months.
“However, the reductions in the Index have been modest. This suggests an upcoming slowdown in the North Carolina economy,” he says.
Tracking NCSU’s economic index. (Graphic courtesy of Dr. Mike Walden)
“Still, a slowdown means continued economic growth – just at a more modest pace – and does not imply negative growth (the definition of a recession). ”
The report comes a day after the Federal Reserve cut interest rates for the third time this year as economic growth slowed to 1.9 percent in the most recent quarter due to the ongoing trade war with China and other issues.
Walden cites a “pullback” in the manufacturing sector as “leading the economic deceleration.”
“Manufacturing hours have dropped in four of the last seven months, and manufacturing earnings have retreated in five of those months,” he notes.
The Index fell 0.6 percent in September from August.
However, Walden also sees good news.
“On the positive side, building permits have maintained their level, and there has been no surge in initial unemployment claims,” he says.
Walden notes that the Index is composed of five components: the Economic Cycle Research Institute (ECRI)’s Weekly Leading Index (http://www.businesscycle.com/resources/), North Carolina initial claims for unemployment benefits, North Carolina building permits, average weekly hours of work of all North Carolina employees in manufacturing, and average weekly earnings of all North Carolina employees in manufacturing.
