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Posted on December 15, 2015 at 10:36 AM by Paige Worsham
December 3, 2015 Report
Good news! After particularly weak sales tax showings for the previous two months, this month’s distribution report includes a small tick upwards. As the graph below indicates, there was an increase of $5.27 million in October (December distribution). This is a change of 2.45%.
Charts provided by the Richmond Federal Reserve
On the positive side, despite weaker business growth, most businesses report steady labor demand. This continues a six-month trend. Unfortunately, the reported mismatch between skills needed and trained workers also continues. And this mismatch may be at least part of the reason that North Carolina’s unemployment rate has been higher than the national and regional rates for both September and October.
Black Friday and Holiday Shopping
Preliminary numbers suggest that Black Friday was more of a cyber day than ever before. According to the National Retail Federation (NRF), almost the exact same number of people shopped online (103 million) as braved the stores (102 million). Depending on online compliance, this shift could have big implications for local sales tax numbers.
The NRF reports that the average spending per person over the holiday weekend totaled nearly $300. Another organization, RetailNext, shows overall spending was actually down 1.4% from last year (due to methodology changes at the NRF, year over year data is not available).
Going forward, Wells Fargo is forecasting that the U.S. economy will become more stable in 2016 with growth between 2.5% and 2.6%. Wells Fargo also assumes a small but ongoing increase in interest rates throughout the year. Economists with the N.C. General Assembly are still calling for a “stable, yet modest growth pattern” for the next few months. So overall the economy is growing, as is spending, but at a rate lower than some of our nearby states.