Fed official says economy 'resilient, at least for now'

DOBSON — Depending on who's delivering the message, America's economy either is thriving or headed to that hot place in a handbasket, but a Federal Reserve Bank official says there is reason for a positive outlook despite current problems.

"North Carolina is doing very well," Matt Martin told about 80 local business, governmental and other leaders during a presentation Tuesday at Shelton-Badgett Viticulture Center on the campus of Surry Community College.

But in rural counties such as Surry, "it's a mixed bag," Martin added as part of an overall tone Tuesday of glasses being both half-empty and half-full.

He classifies the economic situation overall as "resilient, at least for now."

Economic indicators for the Carolinas generally are good, the visiting speaker said while also acknowledging the challenges facing normal folks on an everyday basis.

Martin is a regional executive with the Federal Reserve Bank of Richmond who works from the Charlotte office of the agency often called "the Fed."

It is the central bank of the U.S. which manages the nation's money supply, sets interest rates, oversees commercial banks and keeps the financial system stable.

The Fed has a main board in Washington, D.C., and 12 regional banks across the country including in Richmond.

On the ground

Tuesday's event was spearheaded by the Greater Mount Airy Chamber of Commerce.

Martin told the crowd in Dobson that the Charlotte team, which covers the Carolinas, regularly ventures out to consult business owners and others involved in the rural economy to get a pulse on what's happening in the field.

His presentation, titled "Seeing the Big Picture: A National and Regional Economic Update," was adorned with the usual colorful charts and graphs with squiggly lines showing whether a particular matrix was up or down.

For example, these showed that the Carolinas are leading the Fifth District in job growth, a region including North and South Carolina, Virginia, the District of Columbia and West Virginia.

Though recent employee growth has been anemic with companies not going all-out to add workers, "nobody is really losing their jobs," Martin observed regarding an economic indicator he called "flat."

Yet unemployment isn't rising under that scenario.

The Fed official also referenced another key indicator, Gross Domestic Product (GDP), the total monetary value of all final goods and services produced within a country's borders during a specific time.

Forecasters are projecting 2% growth in real GDP, which Martin says is small but represents growth nonetheless.

Elephant in room

Along with the positives, negatives were cited by the Fed official Tuesday, which surrounded the 800-pound gorilla represented by inflation including high gas prices and effects on consumers.

"Low-income households are struggling," Martin said. "Even households that are doing OK are making choices."

This is viewed in spending habits, including more people using credit cards to make ends meet.

"Seriously delinquent loans are up," Martin said, while mentioning that this is somewhat of a bright spot in the big picture.

"Repossessions aren't going up," which he said reflects a trend of someone perhaps missing two or three car payments but somehow finding the cash to eventually bring things up to date.

"At all income levels, spending has gone up," a "big chunk" of which is due to the gas prices, according to the Federal Reserve Bank official.

The data shows that spending is outpacing income, which he considers "worrisome" with average wages not keeping up with inflation.

A "new normal"

Uncertainty for businesses is now a big concern, referred to as the "new normal," based on information from Martin.

"We're in this highly uncertain environment, but businesses still have to make decisions," with some just forging ahead despite this.

In seeking long-term stability, Martin suggests some basic steps.

"Let's do stuff that gives us the best chance to continue to grow," he said, including real wage gains based on productivity.

Local takeaways

Tuesday's program made an impression on those attending as far as the message delivered on the state of the economy.

"I feel real positive about it," David Hall said afterward from his perspective as a member of the Mount Airy Board of Commissioners and a retired businessman who was the longtime owner of a local barbecue restaurant.

"All the factors are pointing toward real growth," Hall believes, "a really good future for North Carolina and the city of Mount Airy."

Ashly Lancaster, the chamber's president and CEO, said the purpose of Tuesday's event was to make sense of the many complexities surrounding today's economy.

"We see a lot on television that we may not understand or get the whole picture," Lancaster said.

The goal Tuesday was to "shed a little light" in a non-partisan way, the chamber official noted.