The chief economist for the PNC Financial Group told the Rocky Mount Area Chamber of Commerce’s economic summit his forecast for next year is continued expansion nationwide, although not at the same current pace.
“We do not expect to see a recession in the United States, but we do expect to see noticeably slower economic growth in the United States, particularly in the first half of 2020,” Gus Faucher said on Tuesday morning at the gathering, which was held at Benvenue Country Club.
Faucher said the nation’s economy is growing at a rate of roughly 2 percent a year, which is down from roughly 3 percent a year in 2018.
“I would expect by the middle of 2020 that U.S. economic growth is going to slow to about 1.6 percent or 1.7 percent a year,” Faucher said.
Faucher was part of a panel presentation including N.C. State University Professor and Extension Economist Michael Walden and state Community College System President Peter Hans. The three also extensively fielded questions from the audience.
Faucher told the gathering the United States presently is in the midst of the longest expansion in the nation’s economic history, which he attributed to the housing market being well-balanced and consumers being in good shape financially at this point.
“And so, I don’t see the trigger out there that would cause the next recession from within the United States,” Faucher said.
Faucher said there are concerns about geopolitical issues, including the ongoing trade tensions between the United States and China, slowing economic growth worldwide and the Brexit situation in the United Kingdom.
The latter is a reference to the wrangling within the United Kingdom about how to pull out of the European Union.
Faucher said, however, that in the U.S. economy, the economic fundamentals look quite solid.
“And given that, I expect that the current economic expansion will continue at least through the first half of 2020, if not into 2021,” Faucher said.
Faucher said the biggest positive for the nation’s economy is a strong, tightening labor market and that as a result, employers are increasing pay levels.
He said depending on what measure one looks at, wages are up about 3 percent over the past year, while inflation is at only about 1.5 percent.
Additionally, he said he believes another factor that will support economic growth next year is the upcoming presidential election.
President Trump is seeking another four-year term and Faucher said he believes the last thing Trump wants to have going into the election is an economy in a recession.
He said he believes whatever levers the Trump Administration can possibly pull to support economic growth in the near term, they will.
Walden, who spoke next, made clear he also is optimistic the nation’s economy will continue to grow and predicted the same for North Carolina’s economy.
Walden said that, “I do think there is a bright future for Rocky Mount.”
Walden said looking at the state, traditionally Charlotte and Raleigh have been the metropolitan areas with the largest increases in job growth rates, but he said so far this year, Wilmington and Asheville have been the leaders.
Although Wilmington was affected by Hurricane Florence, Walden said the trends in favor of Wilmington and Asheville may be indicators of people looking for smaller metro areas in which to live, as well as growth in retirement living, second home living and the tourism industry.
He also provided data about the Rocky Mount metro area and said what stood out to him was that the average hours one works has increased by 9 percent.
He said he believes that figure tells him that one of the ways businesses with a shortage of employees are compensating is by having their current employees work longer hours.
Hans, who spoke next, said nearly a fifth of men ages 25-54 do not work full time.
Hans said this group may be working scattered jobs, on disability or dealing with substance abuse or mental health questions.
Hans also said he believes another contributing factor is an educational system long focused on, almost exclusively, having people earn four-year degrees at the detriment of career education, technical education and vocational education.
“Now I feel like the tide is turning a little bit,” Hans said. “We’re putting those programs back into the high schools.”
Nash County board Chairman Robbie Davis, who was in the audience, began applauding.
Hans spoke of the launching of a statewide community college marketing campaign, called “Your Hire Education,” and emphasized a desire to get jobless adults back onto the employment rolls.
“We need to pull them back into the workforce to fill these open jobs by providing them with the skills and the knowledge to tap their own gifts and talents,” he said.