SC Economic Outlook-Fall ‘24
South Carolina continues to have a “resilient economy” and earned a B+ grade overall for the fall quarter of 2024. How did South Carolina’s research economist, Joey VonNessen, come to this simple and easy to understand grade? As usual, Dr. VonNessen, of the Darla Moore School of Business, shared his research with an easy explanation of the statistics and trends to keep an eye on going into 2025. In a nutshell, this is why SC scored a B+.
+Consumer spending has remained steady
+Labor market has remained strong
+The state has had positive wage growth
-Consumers are losing purchasing power
-Economy has slowly lost momentum
Take a look at a few graphs that support the remarks above and then we can dig into how we can use the historical data to remain confident in what to expect into 2025 and why we should not panic.
Let’s Take a Look Backwards to Understand Better What’s to Come
As we remember in 2020-21 consumers had access to extra money with stimulus funds provided by the government. The research shows that consumers were spending the money on goods while they were working from home and spending time working on their homes, doing improvement projects and purchasing new items. While goods were being purchased, the service industry took a big hit due to the pandemic and consumers not being able to take part in entertainment, travel or going out to eat. Now, in 2024 the goods bubble has mostly deflated. We know from research economists that ‘durable goods’ translates into what to expect in housing and manufacturing. Since the goods bubble has deflated, that implies market stability is likely to be in our future.
What Does this Data Tell Us about the Housing Market in 2025?
We can expect a more stable market.
Housing policies play a big part in what the housing market has in its short and long term future. Below are the two areas to pay attention to regarding housing.
-Increase supply by building more, reducing regulatory hurdles and making federally owned land available for new development. These solutions are more of a macro approach.
-Increase demand by providing down payment assistance and offering tax incentives to first-time homebuyers as well as other subsidies. These solutions are more of a short-term solution.
Wrapping Up :
SC economy remains strong with steady consumer spending, wage growth and employment levels high.
Persistently high inflation and high interest rates have taken a toll on consumers.
The Federal Reserve’s goal is to stabilize the economy, not to stimulate economic growth. The FEDs will likely cut rates again before the end of 2024.
If you have any questions about your local area market or questions about the information provided above, please reach out! I would enjoy hearing from you.
