WILMINGTON — Unemployment is down, but don’t go burying any gold in your backyard — yet.
UNCW regional economist Dr. Adam Jones presented his economic summary and forecast to the Investor’s Roundtable, an educational group that meets most every month of the year Country Club of Landfall.
Jones presented applied national data to southeastern North Carolina and provided his personal take on the current financial climate.
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Wage growth sluggish
As the economy has recovered, wages aren’t catching up as quickly.
“Wage growth has been a little sluggish by historic standards,” Jones said. Having the average wage growth low has created an added burden on residents spending a larger proportion of their income on housing.
According to the Cape Fear Housing Coalition, 43 percent of residents are considered “severely cost-burdened” in Wilmington.
In a post-recession era, Jones said the types of jobs created haven’t caught up to the higher-wage positions available before.
“This story is particularly true in the region,” Jones said. “For, Wilmington, this is the story. We’ve created a lot of tourism jobs, a lot of leisure and hospitality.”
Implications of slowed wage growth can be observed in the behavior between employee and employer. Jones said “people can jump and get a pay increase.”
“Job switchers” can end up on a higher salary and higher trajectory of career versus “job stayers.”
Consumer confidence
Whether you’re a job switcher or stayer, overall, consumer confidence is on the rise.
While consumer confidence is generally regarded as a positive thing, Jones cautioned the implications of it inflating too high.
When there’s a mismatch of expectation and reality, Jones said there is an inevitable tension point.
GDP increases, income increases, people pay their debts, become confident, then add on more debt, in turn, have a debt burden and the result is income no longer matches initial confidence point.
Wilmington’s economy is somewhere in between adding on additional debt and having a debt burden, according to Jones.
“I think we’re in the early phases,” he said.
Jones isn’t the only economist in town who is cautiously optimistic of the days ahead. Wilmington’s budget director, Laura Mortell, said her department believes the economy will be shifting downward in the coming years at the 2018-19 budget workshop.
“Am I freaking out and worried and going into gold and burying it in my backyard?” Jones asked. “No, but sometime, it might be worth considering.”
Johanna Ferebee can be reached at johanna@localvoicemedia.com or @j__ferebee on Twitter
