Page 12 • Thursday, November 6, 2003
NEWS
The Pendulum
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Alamance County
unemployment remains
above state average
Steve Earley
News Editor
The nation’s economy grew at
a 7.2 percent annual rate during
the third quarter - as measured by
the gross domestic product -
marking the highest rate of quar
terly growth since 1984.
The 7.2 percent fate - which
reflects how much the GDP would
grow if last quarter’s trends con
tinued for an entire year - was
more than double the second quar
ter’s 3.3 percent growth rate and
exceeded forecasts of 6 percent
growth.
While the better-than-expected
growth is encouraging news, it is
far from a guarantee of smooth
sailing for the recovering econo
my, especially for the Burlington
area, said local economic experts.
Coinciding with the significant
rise in GDP - which measures the
value of goods and services pro
duced in the United States - is a
nationwide drop in inventories.
Steve DeLoach, associate pro
fessor of economics, said this is a
promising sign.
“A drop in inventories means
people are spending faster than
businesses thought,” he said.
Businesses, naturally, have to
replace these inventories,
DeLoach said. And that can lead to
increased production and
increased labor demand.
Helping explain the rise in
spending are the Bush tax cuts and
If we were to tiave another terrorist attack in
the next six months, what inventories are really
doesn’t matter.
—Steve DeLoach, associate professor of economics
an increase in consumer confi
dence. Both of these factors, how
ever, rest on shaky ground.
The tax cuts, combined with
deficit spending, traditionally
intended to be short-term meas
ures, have done their job,
DeLoach said.
However, for long-term
growth, he said, it depends where
the government’s money is being
spent.
Spending money on education
or roads - or other endeavors
which help long-run productivity
- will ultimately help the econo
my, DeLoach said, adding that,
spending money on guns and
ammunition - or other endeavors
which, social and political factors
aside, have no long-run benefit,
will ultimately hurt the economy.
The war in Iraq and terrorism
can also have negative economic
effects by damaging consumer and
investor confidence, DeLoach
said.
“If we were to have another ter
rorist attack in the next six
months, what inventories are real
ly doesn’t matter,” he said.
Locally, globalization is an
ongoing concern. In recent years
century-old textile manufacturers
have closed shop due to foreign
competition.
“Textiles are not tied to the
cyclical nature of the economy,”
DeLoach said. “When those jobs
are lost, they’re lost for good.
There’s just no way you can make
socks in a plant in Burlington
when you can do it just as well and
cheaper in Mexico and China.”
The compounding effects of
globalization and recession recov
ery show through in the lines at the
local employment office.
The'county’s unemployment
rate did improve over the third
quarter, falling from 7.8 percent in
July to 6.7 percent in September.
However, county figures remain
above the state average, which fell
from 6.9 percent to 6 percent over
the same period.
“If the reports say the econo
my’s getting better, it hasn’t hit the
little man in Alamance County,”
said Jerome Cheek, manager of
the North Carolina Employment
Security Commission’s
Burlington office.
As far as what the GDP growth
means for the graduate job market,
Thomas Tiemann, professor of
economics, said, “It’s better than if
it hadn’t happened, that’s for sure.
But it doesn’t mean things are
going to be real easy. It’s still a
tough market to find a job in.”
Contact Steve Earley at pendu-
lum@elon.edu or 278-7247.
336.226.4757
$10.00 mm. »rdcr.
Gross domestic product percent change by quarter
The gross domestic product measures the value of goods and services pro
duced in the United States. The 7.2 percent rise in the GDP last quarter
exceeded forecasts of a 6 percent increase and was the biggest single-quarter
jump since 1984.
Quarter 1
Quarter 2
Quarter 3
Quarter 4
2001
-0.6
-1.6
-0.3
2.7
2002
5.0
1.3
4.0
1.4
2003
1.4
3.3
7.2
—