RALEIGH – A decline in COVID delta variant cases is a “big positive” for the North Carolina economy with an improving jobs picture and a surge in building permits driving up propsects for growth, says N.C. State economist Dr. Michael Walden.
Walden, who has retired from teaching, still compiles the monthly NCSU Index of North Carolina Economic Indicators. And he says the September report is bullish, surging nearly 3%.
“The new report shows a strong gain in the Index in September. This bodes well for the state economy in months ahead,” Walden wrote in the report. But caution flags remain. He noted “challenges with inflation and supply constraints still persist.”
In an interview with WRAL TechWire, Walden wrote via email the Index reflected several factors.
- “The September job report was good, so that’s a factor.
- “The weather continues to be good for building, and lumber prices have dropped.
- “But the big positive is that the delta variant turned the corner, and that makes everyone feel better about the economy – leading to more spending and hiring.”
North Carolina’s unemployment rate has declined by 3.1 percentage points over the last year, but much of that momentum took place in late-2020 and early-2021. The seasonally adjusted rate dropped from 7.3% in September 2020 to 5.9% in January, then to 5% in April. And now, after about six months of slow but steady declines, the rate stands at 4.2% in September—down 0.1% from August.
“All components of the Index improved, led by a 18.7% reduction in initial jobless claims and a 21.9% rise in building permits,” Walden wrote in the report.
“The Index had been relatively flat for most of the year, so the month’s strong gain represents a break-out from this trend. With the delta variant of Covid retreating and consumers still flush with cash, the foundation is established for a strong Christmas buying season and hiring. Improved confidence should also motivate more individuals to return to the workforce.”
Consumer confidence nationally also is growing, adding to a more positive economic outlet.
The breakdown of the index by category follows: