HUNTERSVILLE – Though Charlotte is the fifth-fastest growing metropolitan area in the U.S., it still has an unemployment rate of more than 9 percent, Wells Fargo economist Mike Vitner told attendees at a luncheon on April 18.
Vitner, managing director and senior economist at Wells Fargo, spoke about the current and future economic conditions locally, nationally and globally at a Lake Norman Chamber of Commerce luncheon at Northstone Country Club.
Vitner, based in Charlotte, is responsible for tracking U.S. and regional economic trends. He writes for the Wells Fargo’s Monthly Economic Outlook report, Weekly Economic & Financial Commentary and provides updates on housing markets, commercial real estate, regional economies and inflation.
Even though there have been some sectors with small increases, Vitner said there's not been much change in the economic growth stor with a slow recovery since the financial crisis ended in May 2009.
“Growth during those four years has averaged just about 2.1 percent, making it the weakest economic recovery we’ve ever had from a recession,” he said.
But now that the housing industry is in a positive incline, he expects to see acceleration in economic growth over the next few years.
One example, he cites is that investors bought 30 percent of purchased homes during the past year.
Yet, as young people have graduated in a weak job market and carried a lot of student loan debt, the increase in apartment rentals have caught fire as young people are more likely to rent than own, he added.
Charlotte ranks seventh in the amount of apartment starts in the country over the past 12 months, and nationally, vacancy rates are at 4.3 percent, the lowest the in the country in more than a decade, Vitner said.
However, the completion of new complexes is estimated to triple the fourth quarter of this year, reversing the trend.
“We’re only a quarter or two away from where vacancy is going to turn and rents are going to begin to slow,” Vitner said.
As far as job growth, North Carolina has been adding jobs in nearly every arena, except for financial services. There is still three percent fewer people working in the state than prior to the recession, Vitner said. The estimated two percent increase this year would bring the state back to prior recession numbers by the middle of 2014.
The fact that Charlotte is one of the nation’s fastest growing areas, but still has more than a 9 percent unemployment rate is perplexing, Vitner said.
“I really believe that North Carolina is importing unemployment from other states,” he said. “It just seems out of sorts.”
While the U.S. is slowly recovering, Vitner said it’s Europe that concerns him the most since there hasn’t been “one positive step” to fix its economic problems.
“They’re no closer to fixing them today then when they had the riots in Greece in 2010,” he said. “Europe’s problems are a big reason why China’s economy has slowed, why the world economy has slowed. I don’t think anything is going to be fixed in Europe in the foreseeable future.”