Economically, 2018 was a robust year

Anyone who knows what will happen in 2019 has a crystal ball that no one else possesses.

Other than Hurricane Florence, in most respects, 2018 was an above average year for Robeson County, North Carolina, and the United States. Most recently, this good news was reflected in Friday’s strong jobs report. The year ended with the lowest unemployment rate since 2000 and wages are rising at the highest rate in 10 years. Government policy for the past 20 years has focused mostly on issues of the elite, but finally the working class and poor are getting some attention.

The unemployment rate hit record lows, especially for disadvantaged populations such as African-Americans. Teenage black/African-American boys experienced a 20 percent drop in unemployment. Holiday sales increased 5.1 percent the last two months of the year.

The national economy grew enough to help many people move above the poverty line. Compared with two years ago, 3.1 million fewer families need food stamps. The average hourly wage in retail has increased 4.5 percent in the past year. Closer to home, North Carolina tied for the third largest drop in unemployment rate in the nation from November 2017 to November 2018, the latest month with data available. North Carolina also continued a multi-year streak of increasing teacher pay at a higher percentage than any state in America.

People are also “rewarding” North Carolina with their feet. Since the 2010 U.S. Census, North Carolina has passed Michigan as the ninth largest state in the country. In the next 10 years, North Carolina (and Georgia) will likely pass Ohio, Illinois, and Pennsylvania in population. This may be bad news for people who believe places are getting too crowded. However, migration trends are clear and businesses, jobs, and people are continuing to move into low-tax states such as Nevada, North Carolina, Florida, and Washington. New York and Illinois, two of the highest-tax states, had the two largest drops in population during the last year.

In 2019, it will be difficult to keep up the prosperity of recent years. The current economic expansion is longer than nearly any in history. Our major trading partners are growing more slowly than we are (although we are reducing pollution faster than they are). The stock market has been getting considerable attention lately. I liked a recent cartoon I saw that pictured an investor sitting in the front of a roller-coaster car, green-faced, with the caption, “Are you ready to ride again in 2019?”

Of all the financial data that exists, I encourage you to pay the least attention to the level of the stock market. I like the quote attributed to Benjamin Graham, Warren Buffett’s teacher: “Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.”

Much more important signals are the rates dictated by the Federal Reserve Bank. They kept interest rates artificially low from 2009 to 2016, which may have helped stave off a recession in the short term, but created various “bubbles,” such as the stock market, that need to deflate in the economy, which will result in price drops. The Fed has also essentially been burning all of the extra money it printed from 2009 to 2016. This has put a damper on various investments such as stocks. Bloomberg has estimated that federal agencies reduced regulatory costs permanently by $23.1 billion — the largest reduction in at least 30 years.

For most Americans, though, 2018 ended with more people working in their households in a generation, greater recent wage increases than in over 10 years, and great advances in technology. Let’s hope that 2019 brings more of the same for us.

Eric Dent, a former professor at The University of North Carolina at Pembroke, now teaches at Florida Gulf Coast University.


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