The rise in consumer confidence and the renaissance in manufacturing has created the most favorable economic landscape in America in recent years. So concludes Dr. Roger C. Tutterow, a Mercer University economist who spoke at the April conference for the Synthetic Yarn and Fiber Association.
Yet, Tutterow acknowledged there is a general “unease” in business circles. The traditional benchmarks for growth – housing and employment – have not made expected gains. Except for auto sales, retail has been lackluster, he suggested.
Even so, Tutterow said that leading economic indicators are up 3 percent and growth is projected to be 2.5 percent over the year. Also, he said that by June of this year, the nation will have recovered the eight million jobs lost since 2007. But with the population growth, the unemployment rate will continue to be higher. Employment in North Carolina still is down 2 percent from the start of the recession.
Labor and energy costs are fueling the manufacturing comeback, Tutterow asserted. The surge in energy costs could alter projections, he acknowledged, but $100 a barrel oil would not be a problem.
Also favorable to business projections: no inflation in sight. Federal treasury rates will remain at zero for the next 14 months, he predicted.
Global trends that are favorable to the U.S. economy, according to Tutterow, including rising labor costs in Asia, especially China, improvement in the European market, and the rebound in home equity in American households.
Bank charge-offs for developer and household loans have about run their course. “Banks do want to lend money, but many companies don’t have the balance sheets to support loans. But if you have the resources, it’s a borrower’s market,” Tutterow concluded.