Kelly Kenoyer: Mouhcine Guettabi is the regional economist for UNCW, thank you so much for joining us.
Mouhcine Guettabi: Thank you for having me.
KK: So just to start out, can you give me the broad economic picture of what's going on in the United States this quarter?
MG: Yeah, well, the economy is growing at a really healthy pace. Obviously — the big headline was that the Federal Reserve decided to cut interest rates by 50 basis points, and employment has ticked up a little bit. We're at about 4.2% right now, but the economy is still growing. We're still adding jobs. One of the things that's interesting is that there isn't a ton of hiring, but there isn't a ton of layoffs either. And so the labor market has been slowly cooling, because obviously it was hot for a very long time. I hesitate to say soft landing, but I think that we are moving in that direction.
KK: Here in the Port of Wilmington and all up and down the East Coast. We have longshoremen striking, which is shutting down ports all up and down the eastern seaboard. What's the impact going to be on this economy from that?
MG: Yeah, fairly substantial. There was an analysis a few years ago that looked at the economic contribution of the Wilmington port and found that it added or contributed something like $16 billion — with a B — to the North Carolina economy. And there are somewhere north of 90,000 workers that are affected by the port activities. So the footprint of the port is clearly substantial. Clearly it's going to affect what's on the shelf. It's going to potentially play a role in delaying projects. And the longer this goes, the higher the likelihood that it may start seeping into some more inflationary pressures.
KK: Going back to the Cape Fear region. Can you talk about the local economic picture for the Cape Fear region outside of the strike? Anything specific to here?
MG: I think what I've been focusing on quite a bit is what I refer to as this reversion to pre pandemic growth rates. I think a lot about the – I've been referring to it as the economic legacy of the pandemic, meaning what effects of the pandemic have permanently shifted the trajectory of the Cape Fear region, and which of those shocks were temporary?
And so, for example, the labor market over the last three years was growing at like five, five and a half percent. It's clearly not sustainable. The first six months of 2024 were growing at a markedly slower pace, at about 2%. That's not bad that nothing is flashing red, but that's pre pandemic growth rates. Similarly, migration was growing at a really fast rate. Based on census estimates.
It peaked in 2022 and so we're going to continue growing, but at a lower pace. And then again, you come back to the housing market, for example, it's like, what are the tailwinds that would drive in it? Well, a lot of migration, a lot of remote work, those effects are potentially subsiding a little bit, but there are some things that are here to stay, like the fact that the average household income in New Hanover County is now $80,000 which is $10,000 above the statewide average, and that's driven by wages going up because of shortages, but also it's driven by the fact that in migrants that are moving into New Hanover, Pender and Brunswick, those who are coming from out of state have household incomes that are considerably higher than the residents of the area.
So for example, in Brunswick County, the average household income of people who are moving in from outside of the state is $130,000 Wow. And the average household income of residents of Brunswick County is, like, $84,000 so it's 45% higher, and this has been happening year after year after year, which means that the composition of residents is changing, and that explains a lot of what we see before us.
Awesome. Well, thank you so much, Mr. Geuttabi, for coming in and chatting with us.
MG: Thank you for having me.
