Ahhh, the New Year. Can you feel the optimism? According to a recent AP poll, 62 percent of Americans are optimistic about what 2012 will bring for the country, while 78 percent are optimistic about what the New Year will bring for their family. However, only 36 percent believe that their household’s financial situation will improve in the year to come. That pretty much sums up the current state of economic recovery; no expectation for improvement in household finances yet that still translates into optimism.
That being said, here are a few scattered thoughts as we enter the New Year.
Pay close attention to wages
Between the third quarters of 2010 and 2011, real (inflation-adjusted) wages in nonfarm business sectors declined by 2.2 percent. When adjusted for inflation, there has been no wage growth in nonfarm sectors since the Great Recession began in the fourth quarter of 2007. Many households can adjust to temporary wage stagnation or loss with relative ease, but longer-term wage stagnation can have dire consequences on consumer debt, investment rates, poverty levels, homeownership, and demand for social services, among countless other impacts.
In the final months of 2011, the majority of economists revised their forecasts for 2012 downward. In November, the Federal Reserve Bank of Philadelphia quarterly survey of economic forecasters predicted 2012 unemployment to average 8.8 percent, up from their 8.6 percent prediction in August. These same economists are predicting a net gain of 1,478,000 jobs (just over 123,000 per month) in 2012. With this level of growth, the United States would still be more than 4 million jobs shy of pre-recession employment levels in 2007. The Selig Center for Economic Growth at the University of Georgia predicts that the state of Georgia will only add 18,000 net new jobs in 2012, just over one percent of the aforementioned employment gain forecasted for the United States, and recouping just five percent of the roughly 360,000 jobs lost in the state of Georgia since the onset of the Great Recession. Dr. Roger Tutterow, Professor at Mercer University, is a bit more optimistic of Georgia’s outlook, forecasting 30,000 net new jobs in Metro Atlanta alone in 2012.
A good end to 2011 for North Carolina
While North Carolina has also endured a relatively slow recovery, the state experienced a number of positive developments in December, highlighted by multiple expansions of existing businesses as well as Chiquita’s announcement that it would relocate its global headquarters from Cincinnati to Charlotte.
- Chiquita’s relocation will bring roughly 375 jobs by 2014, including management and R&D functions.
- Hitachi Metals will expand its China Grove plant located outside Charlotte and double its workforce, creating 65 new jobs paying an average annual wage of $43,000.
- American Roller Bearing will create 231 jobs during a five-year expansion of its Morganton plant.
- The establishment of a new Bosch dishwasher line will support the addition of 100 new jobs at BSH Home Appliances facility in New Bern. The company will also add 30 new positions at a customer service call center located in the New Bern facility.
- Pete Dawson Co., a food-service wholesaler/distributor, will expand its operations in the state in 2012, opening a new facility in Statesville that will add roughly 50 jobs at an annual wage of $47,500.
- UPM Raflatac, a manufacturer of paper label stock will expand its manufacturing operations in Henderson County, creating 50 new jobs above the county’s average wage.