By Gene Galin
Pittsboro, NC – In Thursday morning’s address at the Chatham Chamber of Commerce Regional Development Briefing, economist Dr. Michael Walden provided an in-depth analysis of the economic landscape in Chatham County, highlighting significant growth metrics while also addressing the challenges posed by rising costs of living and national economic policies. With over four decades of experience at North Carolina State University and as a respected commentator on economic issues, Walden’s insights shed light on the region’s promising future amid potential hurdles.
The Local Economic Landscape
Growth Metrics in Chatham County
Dr. Walden opened his presentation by examining key economic indicators that reflect the robust growth of Chatham County. Between 2019 and 2023, the county has outpaced both North Carolina and national GDP growth rates, alongside impressive job creation and weekly earnings statistics. However, he noted a concerning trend: the cost of living has surged, with the Durham-Chapel Hill metro area experiencing a 24% increase in living expenses during the same period, compared to 20% nationally.
Walden explained that fast-growing areas often see rising land prices and living costs, which can present challenges for residents. He emphasized that while local economic conditions are favorable, the implications of inflation and cost-of-living increases require careful consideration.
National Economic Trends
The Impact of Tariffs
Shifting focus to national economic policies, Walden discussed the implications of tariffs introduced by the current administration. He explained that these tariffs aim to encourage American companies to repatriate investments and address perceived imbalances in international trade established post-World War II. However, he cautioned that prolonged tariffs could lead to increased costs for consumers and potential economic slowdowns.
He noted that tariffs are often misunderstood; they are paid by importers, not exporters. This means that American companies and consumers bear the brunt of these costs. Walden warned that if tariffs remain high, they could stifle economic growth and exacerbate inflationary pressures.
The Role of the Federal Reserve
Walden also highlighted the critical role of the Federal Reserve in managing economic stability. The Fed’s dual mandate involves keeping inflation low and maintaining low unemployment rates, a challenging balancing act. He noted that recent interest rate hikes were aimed at curbing inflation, which, while necessary, could also dampen economic activity if not managed carefully.
He feels that the Federal Reserve is at a crossroads, trying to navigate between fostering growth and controlling inflation. Their upcoming decisions will be pivotal.
Future Outlook for Chatham County
Population Growth Projections
Looking ahead, Dr. Walden presented optimistic projections for Chatham County’s population growth. According to state demographers, the county is expected to see a 73% increase in population by 2060, significantly outpacing national and state averages. This growth is attributed to the county’s strategic location and the appeal of its lower living costs compared to nearby metropolitan areas.
Overall, Chatham County is well-positioned for future growth, with access to the Triangle and Triad regions, making it an attractive destination for new residents and businesses alike.
Opportunities and Challenges
While the future appears bright, Walden stressed the importance of managing growth sustainably. He identified potential challenges, including maintaining affordability and ensuring that development does not erode the qualities that initially attracted residents to the area.
He advised that the key will be to balance growth with the preservation of community values and affordability. With the right planning and commitment from local leaders, “I am very, very optimistic that the bright people here, the people here who are so committed to Chatham County will do that.”
Watch on YouTube – Dr. Michael Walden at Chatham Chamber of Commerce Development Briefing – 5.1.25
Economist Michael Walden discusses Chatham County’s economic outlook and shares insights from his extensive experience in public policy.
00:16 Introduction of Dr. Michael Walden and his accomplishments.
- Dr. Walden is a distinguished professor, economic expert, and author with significant contributions to public policy.
- He has received numerous awards and is actively involved in media and local economic development discussions.
03:03 Dr. Walden shares a humorous retirement story illustrating economic insights.
- He recounts a funny story with skydiving gone wrong.
- The story highlights an economist’s tendency to provide factual but impractical information.
05:12 Chatham County’s economy is growing but facing rising living costs.
- From 2019 to 2023, Chatham County outpaced GDP growth in North Carolina and the U.S.
- The cost of living in the Durham-Chapel Hill metro area increased by 24%, matching North Carolina’s average.
07:21 International trade fairness has been impacted by historical tariff policies post-WWII.
- The post-WWII trade setup favored US products due to lower tariffs compared to foreign tariffs.
- Current administration aims to negotiate lower foreign tariffs to promote equitable trade.
09:27 Tariffs may raise costs and impact economic growth negatively.
- Businesses may absorb tariff costs through efficiency gains or pass them onto consumers, fueling inflation concerns.
- Economists worry that prolonged tariffs will slow the economy, as indicated by recent negative GDP growth linked to increased imports.
11:45 The Federal Reserve uses monetary policy to balance inflation and unemployment.
- The Federal Reserve controls the money supply to stimulate or slow down economic spending based on unemployment and inflation rates.
- Interest rates are adjusted to influence borrowing costs; they were lowered to near 0% during COVID-19 and increased in response to rising inflation.
13:42 Current economic indicators show steady growth despite inflation challenges.
- Job growth and business investment remain strong, signaling a resilient economy.
- The Federal Reserve is striving for a 2% inflation target, which is necessary for household budget stability.
15:35 Chatham County’s long-term economic outlook is positive with significant population growth forecasts.
- Chatham County is projected to see a 73% population increase by 2060, outperforming state and national averages.
- Despite growth potential, challenges include maintaining affordability and avoiding price increases while fostering economic development.