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Friday, March 15, 2013

ASHRAF REPORT: Economist’s quarterly report notes an improving local economy

In the New Year, UNC Pembroke economist Dr. Mohammad Ashraf issued his newest quarterly report on the local, state and national economy.

Economics is sometimes referred to as the “dismal science,” but Dr. Ashraf’s latest report is the sunniest in several years. To produce the Ashraf Report, he monitors a wide variety of economic data, including unemployment, productivity, wages, housing, savings rates and anything he believes is relevant at the moment.

The report may be viewed at: www.uncp.edu/home/ashraf/CEP/January 2013-Volue 9-Number 1.pdf

Mohammad Ashraf“The economy seems to be getting better,” Dr. Ashraf said. “I have just been reading the state-by-state employment reports. Salaries compared to a year ago are 1.4 percent higher and payrolls are rising.

“Hopefully, we won’t be cutting any more government expenditures that could result in more unemployment,” he said. “In the long run, deficits are bad, but in the short run, they are helpful.”

The national economy as seen in the gross domestic product report for the fourth quarter grew at a rate of 3.1 percent, which Dr. Ashraf said shows the stubbornness of the recession.

But what of the local economy? The signs are also improving locally, he said, but not as robustly as the state or nation. “Robeson County is improving a little,” he said, noting that double-digit unemployment remains.

“The unemployment rate for Robeson County while declining remains higher than the national or the state unemployment rate,” the report states. “It stood at 12.2 percent during November 2012. It climbed as high as 14.8 percent during July 2011.”

North Carolina has a 9.0 percent unemployment rate compared with 7.8 percent nationally. National, state and local unemployment rates are showing separation. The state is improving slower than the nation and Robeson employment is improving slower than the state.

“Robeson gets hit earlier and harder by recessions, and we recover slower,” Dr. Ashraf said. “Our recession has lasted longer because the skill level of our workers is not high.”

Although home prices locally did not benefit greatly from the pre-recession housing price explosion, Robeson did benefit because of its construction employment.

“We benefited from the housing bubble, but when it popped, we were punished more severely than the nation,” Dr. Ashraf said. “The construction sector is improving as permits are increasing.

“We led the nation into the recession, and were lagging in the recovery,” he said. “Again, the recovery nationally is not very robust, and any unforeseen incident could derail it.”

Europe remains a problem because they share a currency but lack political and fiscal union, Dr. Ashraf said. Politics in the U.S. is problematic and not unlike Europe in two ways.

“We also talk about austerity verses stimulus of our economy,” he said. “We are also showing signs of political disunion.

“Europeans don’t want to bail out Greece and Italy, and our nation seemed unwilling to pay for the recovery after Hurricane Sandy,” Dr. Ashraf said.

As for the recent rise of the stock market, Dr. Ashraf says, “I don’t look at the stock market.”

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