Kelly Kenoyer: I'm here with Mouhcine Guettabi, the regional economist for UNCW. Thank you for joining us.
Mouhcine Guettabi: Thank you for having me.
KK: So, I'd love to hear what you've seen in the past few months in terms of national trends in the economy.
MG: Yeah, the economy, largely speaking, is holding up well. In that, if we look at the metrics that we care about, like GDP, which is Gross Domestic Product, the numbers have been fairly healthy. The U.S. economy is growing at about 2-2.5%, up until the last number that's come out. That's a healthy number. However, it's important to note that GDP essentially measures consumption, investment, government spending, and net exports. What it does not tell us is what's happening in the labor market. And one of the things that's been interesting to follow is: while growth using GDP has been solid, that has not necessarily translated into a labor market in terms of job growth.
KK: Do we know why?
MG: The term that's been bouncing around a lot lately is “jobless growth,” and it's because companies are almost favoring what we refer to as capital investments: into AI, into technology, rather than investing in hiring sprees. And there is also a little bit of uncertainty. And so, typically, when there is uncertainty, companies sit on their hands and they wait to see where things are potentially heading.
KK: Interesting. All right, we got to get into my favorite topic, which is housing. How's the housing market doing?
MG: It's fine. It's boring. There is not a whole lot happening, right? And so, median listing prices are still really elevated in the Wilmington metro. It's about $485,000, which is really high. The number of listings are continuing to creep up.
We've seen some de-listings. This is not just a Wilmington story, but a national story where it seems like sellers are kind of just listing their homes for a couple weeks or a month, and then they're not seeing much action, and they're removing them from the market. This is not behavior that we saw over the last few years, but it indicates partially a little bit of weakness, right?
And so consumers are facing fairly high interest rates, this uncertainty in the labor market, and then really elevated prices. And so there isn't a lot of action. That's why I'd say it's boring because that gap that we've discussed before between the expectations of sellers and that of buyers is still fairly high. I'm not ready to say, oh, this is a buyer's market, but it has certainly shifted away from sellers for now about 24 months and is continuing to do so, but it's moving at a slow pace.
KK: I'd love to hear a little bit more about general economic standing here. You gave me a note about: is the economy cooling in the Wilmington area? Is it? Are we seeing that?
MG: Yeah, I mean, I would say yes, with the caveat: relative to the standout growth that we would see in the last few years. So, we're essentially reverting back to pre-pandemic growth rates, but the leaders this time around are different because healthcare now is such a big part of the economy. The fact that construction hasn't cooled means that investment is continuing. Leisure and hospitality is growing at about 1.7, 1.8% which is fine. Again, it indicates to me that people are still coming to the area, but it's not the leader.
So, cooling is relative. If you've gotten used to six and a half percent growth, I'm making up the number. That's not realistic, right? Like you can't make budgets based on post-pandemic growth rates because they were an aberration, and so now this is the normalization of growth. We're still the second or third fastest growing metro in the state.
KK: So the national economy, we're seeing some slowing in the labor market. It's cooling a little bit, but we're cooling less.
MG: 100% Yeah. The way I typically say this is, North Carolina typically outperforms the U.S.. Wilmington is outperforming the statewide average, and in fact we've been either the fastest or second fastest growing metro in the state, behind Raleigh, for the last couple of years.
KK: We're not getting less popular anytime soon.
MG: That does not seem to be the case.
KK: Well, Mouhcine Guettabi, thank you so much for joining us.
MG: Thank you for having me.
