Three economists highlighted economic trends on the global, national and local levels Wednesday during the keynote lunch at the 2024 WilmingtonBiz Conference & Expo.

Tom Barkin, president and CEO of the Federal Reserve Bank in Richmond, began the annual Economic Outlook program from UNCW’s Swain Center by noting the Fed’s recent interest rate cut.

“That cut came largely because you see progress on inflation,” Barkin said. “Now this drop is being driven by consumers. The way I like to think about it is people are still frustrated by high prices, and when you go in the store and you’re frustrated by high prices, you become more price-conscious. I see consumers still spending, but they’re choosing, they’re trading down.”

And those choices are, in turn, moderating price increases, Barkin said. Economic activity on a national scale has remained robust, with low unemployment, higher wages and high valuations.

Supported by strong spending levels, the U.S. economy has returned to pre-pandemic Gross Domestic Product growth trends, according to Barkin. The national labor market, in addition, has remained strong, adding 160,000 jobs on average nationwide over the last three months.

Even with the rate cut, it’s still too soon to “declare victory,” Barkin said, because success looks different for different people in the financial world. Current events like the recent port workers’ strike and global conflicts cast uncertainty over future inflation. The employment market’s future remains uncertain as employers take a cautious approach to hiring – two factors that could affect inflation moving forward.

“We operate in an environment fraught with uncertainty,” Barkin said. “So we’re just going to have to be attentive and learn as we go, as we decide how fast we need to move and how far to go during this rate reduction cycle.”

Ben Shoesmith, a senior economist at KPMG, addressed global economic trends.

While European economies like Germany’s are currently lagging, Shoesmith highlighted Asia’s “outsized” impact on global economic growth. 

“When we look at Asia, it is dynamic. It has different growth patterns, a very young population, increasingly educated in STEM subjects, and we think there’s a lot of potential here,” Shoesmith said.

He also highlighted the potential for economic growth in South America, Latin America and parts of Southeast Asia. Overall, Shoesmith said he sees the global economy in a positive light.

“The globe is in a pretty good place. Yes, there are regions that are struggling … There is political uncertainty,” Shoesmith said. “But on the whole, we’re not seeing a global recession like we would have seen in the great financial crisis.”

On a local level, regional economist Mouhcine Guettabi said growth rates in visitors and migration are trending toward pre-pandemic levels. The Wilmington area “won” on the economic front during the pandemic. Since the pre-pandemic years, the area has added 17,000 new jobs and increased wages 53% since 2019, Guettabi said.

The average household income in Wilmington is now approximately $80,000 annually, Guettabi said, which is $10,000 higher than the statewide average. That higher-than-average income is due to two factors – migration and a shift to higher-paying jobs.

Migration into the Cape Fear region peaked in 2022, Guettabi said, with the area attracting substantial numbers of new out-of-state residents with high incomes. Those moving to Brunswick County from out-of-state have an average income of $130,000, raising the overall average.

The available jobs in the Cape Fear region have also shifted into higher-paying sectors like health care and tech or industries that have raised wages in response to worker shortages, Guettabi said.

“Incomes are higher, and there is no going backward,” he said, “but migration, the rate has already started to slow.”

Guettabi said he expects some pandemic and post-pandemic economic trends, like an uptick in visitor spending, to level off and return to pre-pandemic levels. At the same time, other aspects, like a high number of remote workers and an older population, appear to have stuck.

Growth and changes during and after the pandemic have left the area with challenging questions about how to accommodate a growing population and maintain a high quality of life that will continue to draw new residents, Guettabi said.

“I think we need to be really careful in how we approach the next few years, to take advantage of the wealth that has entered the area and to ensure that the area remains a place that is attractive for businesses (and) for individuals.”