Released October 13, 2009
RALEIGH, N.C. -- When people look at today's economy, one of their concerns is where the jobs will come from. Many economists expect consumer spending to be lackluster. If consumers aren't spending, who else is there?
Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"There are really four sources of growth in the economy - four sources of spending. Consumers, which we've mentioned, businesses, government and then what we call net export - how much we're exporting minus how much we're importing.
Clearly, there's a big issue with consumer spending. Consumer spending, of course, has dominated this decade. Consumers went into debt. They bought everything that was out there to buy. Now, they're pulling back, and a big concern among economists is, will they begin to spend more and at what rate? And probably the answer is, very slowly. B
usinesses, of course though, can spend. Businesses spend money to build new factories, to upgrade to buy new technology. They haven't been doing that recently, during the recession. We expect they will start to do that, so that will be some source of economic growth.
Government spending, of course, accounts for over 25 percent of the economy. Government has been spending. We obviously know about the stimulus plan. That's going to continue, actually become greater in 2010.
And then, net exports, and this has actually been a bright spot in our economy. Unbeknownst, I think, to most people, we have gotten our trade balance, which has been very negative in recent years, almost to a balance. And exports should grow very strongly for two reasons. One, the weak dollar and secondly as the rest of the world recovers from the recession."
--30--
http://www.ncsu.edu/project/calscommblogs/news/archives/2009/10/economic_perspe_467.html
