Clearing and partly sunny, with a chance of occasional showers: that’s the rough translation, in weather terms, of the Economic Barometer that University of North Carolina Wilmington economists have prepared for the third quarter of 2014. Most indicators are positive, but some economic sectors remain volatile, the report indicates.

For the Wilmington Metropolitan Statistical Area (MSA) specifically, UNCW senior economist Woody Hall forecasts a modest rise of 2.2 percent in gross domestic product (GDP) this calendar year. That’s just slightly higher than the U.S. Department of Commerce’s  forecast for national GDP growth, Hall wrote.

Hall believes that local unemployment will continue its current downward trend, although average monthly MSA employment gains continue to be “relatively weak.”

Data on local retail sales (slowing), New Hanover County room tax collections (up over the previous year) and residential real estate (stabilized with moderate growth) are also included in Hall’s report.

The outlook for the national economy, prepared by UNCW executive-in-residence Tom Simpson, highlights “robust gains” in the labor market during the first half of 2014, and a rise in the hours worked by private sector employees. These positive signs are tempered somewhat by a slowdown in productivity, driven partly by the “weaker pace of investment” over recent years, Simpson pointed out.

His report also looked at household consumption (erratic), net worth and disposable personal income (rising steadily), household debt service payments (plummeting), housing affordability (favorable) and home sales (firming).

After analyzing these indicators, Simpson predicted growth in real GDP as “likely to be in the 3 percent range over the next couple of years, about 1 percentage point faster than growth in potential output.” He further stated: “In these circumstances, economic slack will diminish gradually.”

This gradual improvement will not show in substantially lower unemployment rates, Simpson believes, because an improving labor market will likely expand the labor pool by attracting workers who had stopped searching.

A benefit of gradual recovery, Simpson pointed out, is that inflation could well remain below the Fed’s 2 percent target. “Accordingly, the Fed will be unhurried in normalizing its policy interest rate  . . . “ he wrote.

To read the third quarter Economic Barometer in its entirety, click here.