1. ECONOMIC OUTLOOK 2016 Dr. Michael L. Walden

2. THREE BIG STORIES IN THE NATIONAL ECONOMY IN 2015
CONTINUING SLOW GROWTH
PLUNGING ENERGY PRICES
U-TURN BY THE FEDERAL
RESERVE

3. SOME NUMBERS 2015 LONG RUN AVERAGE GDP 2.4% 3.2% GDP pc 1.4% 1.7%
Payroll jobs 1.9% %

4. WHY THE SLOW GROWTH? SLOW GROWTH IN LABOR FORCE * AGING
* LOWER BIRTH RATE
SLOW IMPROVEMENTS IN PRODUCTIVITY
FRUGAL CONSUMERS
STIMULUS BORROWED FROM FUTURE GROWTH

5. HOUSING MARKET CONTINUES A MODEST RECOVERY

6. THE OIL PRICE PLUNGE

7. KEPT INFLATION AT BAY
ALL ITEMS CPI 0.5%
CORE CPI: 2.0%

8. INTEREST RATES REMAINED HISTORICALLY LOW

9. DOLLAR’S INTERNATIONAL VALUE ROSE

10. FISCAL POLICY: RELATIVE SIZE OF DEFICIT IMPROVED IN 2015
BUT IMPACT OF HIGHER INTEREST RATES
AND RELATIVE SIZE OF TOTAL DEBT EXPECTED TO TREND HIGHER

11. BIG NEWS: THE FEDERAL RESERVE FINALLY MOVES
RAISED SHORT-TERM RATE 0.25% POINTS – LIKELY FIRST OF MANY
NEEDED IF WANTS INTEREST RATE TOOL TO ADDRESS NEXT RECESSION
WORRIED ABOUT POSSIBLE ASSET “BUBBLES”

12. NATIONAL 2016 FORECASTS SLIGHTLY FASTER GDP GROWTH: 2.5%
2.5 MILLION NET ADDITIONAL PAYROLL JOBS
FEDERAL FUNDS RATE: 1% BY YEAR’S END
ALL-ITEMS INFLATION RATE IN 2% TO 2 ¼%
RANGE
IMPROVED WAGE AND SALARY GROWTH

13. NORTH CAROLINA: BETTER ECONOMIC NUMBERS THAN THE NATION IN 2015
GROWTH IN: NC US
GDP % 2.2%
LABOR FORCE % 0.6%
PAYROLL JOBS % 1.9%
HSEHOLD EMP % 1.4%

14. NORTH CAROLINA’S ECONOMIC RIDE HAS ALWAYS BEEN BUMPIER

15. FASTEST JOB GROWTH IN: FINANCIAL SERVICES PROFESSIONAL/BUSINESS
CONSTRUCTION
OTHER SERVICES

16. STILL DISPARITIES IN GROWTH
FASTEST GROWING METROS: CHARLOTTE, GREENSBORO, DURHAM
METROS LOSING JOBS: FAYETTEVILLE, HICKORY

17. NORTH CAROLINA 2016 FORECASTS
TIED TO NATION
3.6% GDP GROWTH (2.5% US)
90,000 NET ADDITIONAL PAYROLL JOBS
HEADLINE JOBLESS RATE: 5.7% TO 5.1%

18. LONG-RUN FACTORS IMPACTING THE ECONOMY

19. AGING
% Over Age 65
2010: 13%
2050: 21%

20. TECHNOLOGIAL UNEMPLOYMENT
HALF OF TODAY’S OCCUPATIONS COULD BE DOWNSIZED DUE TO TECHNOLOGY
NEED FOR
RE-SKILLING

21. FINAL WORD: DON’T FORGET THE “KNOWN UNKNOWNS” AND “UNKNOWN UNKNOWNS”
K-UK’s:
terrorism
China
Middle East
weather/epidemics
power grids
election
UK-UK’s: ??????

22. THANK YOU!