1. ECONOMIC OUTLOOK 2018: “SETTING A RECORD” Dr. Michael L. Walden

2. HEADLINES
DESPITE SLOW GROWTH, CURRENT EXPANSION WILL BECOME 2ND LONGEST THIS YEAR
GROWTH HAS ACCELERATED – WILL IT LAST?
STILL, FAMILIAR PROBLEMS PERSIST

3. MOST OF THE MAJOR INDICATORS IMPROVED IN 2017
Annual Rates
GDP % % %
JOBS % % %
WAGES % % %
INVESTMENT % % %
STOCK MKT % % %
GDP, wages, and stock market are after-inflation; jobs are the change in payroll job numbers, and investment is % of GDP

4. WHY THE IMPROVEMENT IN 2017?
POLICY OR
POSITION ?

5. POLICY: BUSINESS AND INVESTOR COMMUNITY LIKE THE POLICIES OF THE TRUMP ADM.
DEREGULATION
ENERGY
TAX CHANGES
TRADE ????

6. POSITION: ONLY RECENTLY HAS CONSUMER CONFIDENCE RETURNED
SEVERITY OF RECESSION SCARED CONSUMERS – MADE THEM “TIGHTWADS”
WITH THE ECONOMIC EXPANSION CONTINUING, CONSUMERS ARE NOW CONFIDENT

7. OTHER FACTORS INFLATION REMAINS TAME
FOREIGN ECONOMICS ARE DOING BETTER
OIL PRICES HAVE RISEN ($30 TO $60/BLL)
SHORT-TERM INTEREST RATES ARE RISING

8. THE FEDERAL RESERVE WILL BE UNDER NEW LEADERSHIP
JEROME POWELL WILL BE THE NEW CHAIR
ALSO, THE PRESIDENT WILL FILL FOUR OF THE SEVEN MEMBER GOVERNING BOARD

9. FEDERAL RESERVE’S 2018 AGENDA
HOW FAST TO RAISE SHORT-TERM RATES?
HOW FAST TO REDUCE
PORTFOLIO?
WHO WINS: “HAWKS” OR “DOVES”?

10. WORRIES IN THE ECONOMY CONSUMER DEBT? HOUSING BUBBLE?
STOCK MARKET BUBBLE?
BOND MARKET BUBBLE?
INTERNATIONAL EVENTS?

11. WALDEN’S BIGGEST WORRY
CHANGES IN THE JOB MARKET DUE TO TECHNOLOGICAL ADVANCES –
AKA:
TECHNOLOGICAL UNEMPLOYMENT

12. NATIONAL ECONOMIC POLICIES TO WATCH FOR 2018
INFRASTRUCTURE PLAN
ENTITLEMENT REFORM
TRADE NEGOTIATIONS
HEALTH CARE REVISITED

13. NATIONAL FORECASTS FOR 2018
GDP % %
JOBS % %
WAGES % %
INFLATION 1.7% %
GDP and wages are after-inflation; jobs are changes in payroll job numbers

14. NORTH CAROLINA

15. NC AND US JOB GROWTH RATES
2012 EXPLANATION – BIG DROP IN PHARM PRODUCTION IN NC

16. NC SECTOR GROWTH RATES, 2009-2017 (% change in real GDP)

17. JOB GROWTH IN NORTH CAROLINA CONTINUES TO BE HIGH WAGE AND LOW WAGE INDUSTRIES

18. GROWTH ALSO CONTINUES TO BE CONCENTRATED IN LARGE AND MEDIUM SIZED METROS

19. REGIONAL GROWTH HAS NOT BEEN EVEN (% CHANGE IN PAYROLLS, 2010 - 2017)

20. NC CONSTRUCTION STRONGER, BUT STILL UNDER PRE-RECESSION LEVELS (RESIDENTIAL BUILDING PERMITS; FORECAST FOR 2017)

21. THE NCSU LEADING INDICATOR INDEX SUGGEST CONTINUED STATE GROWTH

22. ISSUES FOR THE FUTURE
1. TECHNOLOGICAL UNEMPLOYMENT 2. URBANIZATION OF THE STATE 3. SUPPORT IN DEPOPULATING COUNTIES 4. ACCOMMODATING 3 MILLION MORE RESIDENTS BY POWERING OUR FUTURE 6. IMPROVING EDUCATION & RE-SKILLING

23. QUESTIONS