N.C. State University economist Michael Walden said this week North Carolina will see economic and employment growth during the second half of the year, as well as a continued job disparity between urban and rural areas.
Those findings were part of Walden’s bi-annual report on economic predictions, “The North Carolina Economic Outlook, Summer 2014.”
Walden said economic growth will pick up in the second half of the year, continuing the five-year economic expansion since the end of the recession. He also said more than 85,000 North Carolina residents will become employed in new payroll positions by the year’s end.
This job expansion will bring North Carolina’s total jobs to its pre-recessionary level and lower the state-wide unemployment rate to between 6 percent and 6.5 percent. Job growth in 2014 will not outpace last year’s job growth, however, and the rate may be affected by previously discouraged workers who decide to rejoin the labor force.
Walden said with the anticipated increase in jobs, the newest concern is compensation distribution. Walden said although the employment picture has improved, wages have remained stagnant and until this changes, consumer spending will continue to make only modest gains.
Higher-paying professions and lower-paying service and support jobs have seen disproportionate growth, at the expense of middle-income jobs. Structural forces, related to technology and machinery replacing jobs, will increasingly become a problem for workers.
While all regions are likely to see joblessness decrease, the disparity between metropolitan areas and non-metropolitan counties will continue. Walden predicts the unemployment rate in Durham-Chapel Hill, Raleigh-Cary and Asheville to fall to 5 percent or below by December. In May, these areas had unemployment rates between 5.1 percent and 5.4 percent.
Rocky Mount, Fayetteville and Hickory are projected to have the highest rates of joblessness. Rocky Mount’s May unemployment rate of 9.8 percent is expected to decrease to 9.6 percent by December.
Increases in wages and borrowing, especially by young people, will be necessary to stimulate consumer spending and the housing recovery, Walden said. Young households continue to suffer more than other age groups from effects of the recession and have not returned to pre-recessionary home buying or borrowing rates.