Season 2 Episode 41
Previewing 2025’s Economic Outlook Conference
Joseph Von Nessen serves as a research economist in the Division of Research at the Darla Moore School of Business, where he concentrates on regional economic analysis, forecasting and housing market trends. His work includes producing economic impact studies, feasibility assessments and market evaluations for a broad range of public- and private-sector partners.
He leads the development of the University of South Carolina’s annual economic outlook for the state and advises the South Carolina Board of Economic Advisors. Von Nessen also provides regular briefings to the Federal Reserve Bank of Richmond and is a frequent presenter at major national conferences on topics related to regional and state economic performance.
This is Dr. Von Nessen’s first appearance on Moore Impact. Today’s episode discusses the upcoming Economic Outlook Conference on December 11, 2025.
Topics include:
To learn more about The Economic Outlook Conference, click here.
To learn more about Dr. Joseph Von Nessen, click here.
Photo Courtesy: Darla Moore School of Business
Kasie Whitener (00:04):
Good morning, happy Tuesday. Welcome into Moore Impact. My name is Kasie Whitener. I'm the host for our Moore Impact show, which brings our Darla Moore School of Business Scholars and practitioners in from Green Street over to Millwood Avenue to share with our local Columbia audience, but also our audience on Makethepointradio.com, all of the things that we're doing in the Moore School to have impact on our city, our state, and our nation, and really the world. And with me today is Dr. Joey Von Nessen, who is a research economist in the Darla Moore School. He's hosting a new event, the Economic Outlook Conference, coming up on December 11th, and we're gonna get to that in just a minute. But Joey, you're a media celebrity here in Columbia and do a lot of media appearances. And so here I'm like super nervous on the other side of the mic to ask you questions about yourself and your background.
Joey Von Nessen (00:49):
Well, first, thanks for having me this morning. It's great to be here. Uh, yes, I've been at the Moore School for about 16 years, and my role is as a research economist in our division of research, which is where we practice primarily applied economic research. And I sometimes like to call what we do. So what economics? Meaning that we're always looking at economic data and asking the question. So what? How can we use economic data to help organizations and businesses and nonprofits and really all South Carolinians, uh, make good strategic decisions, but especially those that are in the business community or in, we might call what we might call the business adjacent community.
Kasie Whitener (01:27):
Right. I heard somebody on a podcast say yesterday that, uh, you know, well, not everybody's gonna go to school for economics, and that's probably a good thing because we don't need a lot of economists. And I was like, yeah, we do. Like, bring in all the economists,
Joey Von Nessen (01:39):
Well,
New Speaker (01:39):
or at least a basic economics understanding.
Joey Von Nessen (01:41):
Well, it is, it is true. Not everybody likes economics. Some people love it, some people, uh, don't. But I, uh, I I like to think that a, uh, economics is a subject where a little bit of knowledge can go a long way.
New Speaker (01:52):
Certainly.
Joey Von Nessen (01:52):
Uh, and when you really understand the basic principles of economics, it can help you understand the landscape that you see, uh, from a, from a business perspective and from a, a national perspective. And, and you can really evaluate local, uh, local policies and just really have a better understanding of what's going on in the world.
Kasie Whitener (02:10):
I can, uh, fully appreciate that and I fully appreciate the work that you all are doing in the, uh, in the Moore School. Uh, we've had Orgul Ozturk here a couple times.
Joey Von Nessen (02:17):
Sure. Yeah.
New Speaker (02:17):
Dr. Ozturk, uh, and talking about the, uh, economic policy center there, EPIC uh, that just got launched I think this year, last year. Where she's really trying to distill this economic scholarship into usable white papers to help inform our policy makers and to inform, you know, even our, the folks that are working in inside the Department of Commerce and inside the Department of Education help them kind of understand what is that economic data saying to us in terms of how effective the policies that already exist are, and what kinds of tweaks and changes we should be making to those policies. So I like that you call it, so what economics, it's the, like, why should I care? But there's also this idea of like, how do we take action on what we're learning in these spaces?
Joey Von Nessen (02:56):
Yes. And, and really trying to understand the, the economic landscape. And anytime you're trying to make a business decision, the first thing you have to understand is the market environment that you find yourself in. And that's constantly changing, constantly evolving. And so we try to provide actionable information that helps people to navigate that landscape. Again, whether you are, uh, working in a business, whether you're looking to plan for the future, if you're working in a trade association, regardless of what your, uh, what your, what your question is, you can use economic data, certainly in a business setting to help think about the future and strategically plan.
Kasie Whitener (03:30):
I have an, uh, entrepreneurship class that's been working with, uh, entrepreneurs out in the world. And yesterday, one of the groups that presented was working with one of our alumni, uh, with FSI Rentals. He does, um, home furnishing rentals and, and corporate furnishing rentals and things like that. And they were talking to him about a growth strategy and how they could help him to, to find a new location and build out into a new market and this and that. And I don't think any of that, like, does the economic forecast support this kind of expansion really entered the conversation. It was just like, what are his capabilities? What are his resources? What are the opportunities in the marketplace? There wasn't necessarily this idea of like, well, where is the economy headed? And do we think now's the right time, time to grow or to expand? But that's some of the stuff that you guys are looking at, are these indicators that are, um, there seem to be like lagging indicators. We already know this information is coming. But like, how can we use that to create these predictive models of like, based on what we're seeing, we expect it to look like this or, or like that.
Joey Von Nessen (04:24):
Exactly. And we can look at it from a 30,000 foot view or from a more targeted perspective. So your examples are really good. One, if you're a business looking to expand, uh, looking to enter a new market, a natural question is what does, what is that market going to look like? And can your business model meet the demand that, uh, that is, that is actually there in, in a particular time period? So it may be the case that you have to pivot, maybe not. Uh, there may be a scenario where you have to change price points. I mean, there are all sorts of different questions that you can ask about a market and trying to meet, uh, the needs of a market and basically have supply and demand come together. Uh, and, and so how do you do that? And what data do you do you use? And how can you forecast what that's likely to be? And again, that can help you with strategic planning.
Kasie Whitener (05:09):
And how do we bring in all the relevant information.
Joey Von Nessen (05:11):
Exactly.
New Speaker (05:11):
I mean, really matters to the decisions we're trying to make, which I think is really important too. We jumped right into the study piece of this, but tell us a little about your background. Where did you study and how did you end up at the Moore School?
Joey Von Nessen (05:21):
So, I'm from South Carolina originally. I actually grew up in Columbia, and I did my undergraduate work up at Furman University in Greenville.
New Speaker (05:28):
Go Paladins.
Joey Von Nessen (05:29):
And yes, absolutely. And that, and that's what, and that gave me my start in economics where I really got interested, uh, in, uh, in, in markets and in, and the economy and in and in business more generally. Uh, and then I came back to Columbia to do my PhD at USC and then stayed on at USC afterwards in, uh, the capacity as, as a research economist. And, and it really is a good fit for me. I enjoy being, uh, able to stay close to home and, and, and really contribute to the community that, uh, that I've lived in all my life. So it's, it's, it's really nice to be able to stay close to family and to stay in South Carolina and watch it continue to thrive.
Kasie Whitener (06:05):
We should update your intro bio to homegrown research economist.
Joey Von Nessen (06:09):
There you Go. I like that. I like that.
New Speaker (06:10):
This is our, our South Carolina Native Homegrown research economist, which is awesome. Not in any way to say that our other folks who've come here from other schools are not what we're looking for, but who did you study with at Carolina? Some of the professors that you had in your, in your, uh, in your PhD program? Are any of them still at the, at the business school?
Joey Von Nessen (06:27):
Oh Yeah. A lot of 'em are, are still there. And our division director, Dr. Doug Woodward, uh, still, uh, running the, the division of research. And, uh, we've worked together for, uh, for my entire, uh, career at, at, at USC. And a lot of professors are still there, ones that I've worked with for, for a very long time. Uh, and so it's, it's a great community to be a part of.
Kasie Whitener (06:45):
That's good stuff. Tell us the difference between being a research economist in the Moore School and part of that research side versus some of our, uh, tenure track professors, our, our faculty that are in the classroom and that kind of thing. What are the primary duties of your research economist?
Joey Von Nessen (06:58):
Well, most of my work is involved in applied economic research, so less so on the, the academic side. So we're more working with the business community on a regular basis, and again, doing projects that are, uh, looking to answer a specific question or to work with a, an individual, uh, uh, individual business or organization to help them to make strategic decisions going forward. Um, and my role is less in the classroom as well, again, more focused on, on the applied research side. But, uh, I do engage in, uh, in, in coursework from time to time. And, uh, for the last several years, I've been leading a study abroad program to Germany, uh, where we go as part of maymester. So it's a, a 10 day program.
Kasie Whitener (07:42):
Sure.
Joey Von Nessen (07:42):
And it's centered around the automotive industry and the growth of, of the automotive cluster in South Carolina, specifically as a case study of economic development. And it turns out as many in the audience know that, uh, German foreign direct investment is a very important part of South Carolina's economic growth. So you think about BMW and Mercedes, and there are all sorts of, of German companies in South Carolina. And so we teach students about that connection between the German economy and the South Carolina economy, primarily focused on the auto industry and why it's so important to look at questions surrounding trade and why it's so important to look at foreign direct investment as an integral part of, of growth and what that means for, for South Carolina's future. And that's a, that's a, it's, it turns out to be a very popular course. Uh, uh, of course a lot of students are, are interested in, in, uh, foreign study and in Germany in particular. And, uh, so that's something that we've had some success with in, in the last several years.
Kasie Whitener (08:37):
You're doing a great job, teeing up our next conversation, which is gonna be about Scout Motors and some of the investments that are being made here in South Carolina. We'll be right back.
Kasie Whitener (08:58):
All right. Welcome back to Moore Impact. I'm Kasie Whitener, your host. We're bringing our Darla Moore scholars and researchers out of the Green Street location over here to Millwood Avenue to share with our Point audience and also with Moore Impact our podcast, uh, the different impacts that we're having on the nation, on the state, uh, on the city, of course, and, and really on the world. And what's coming up is the 2025 Economic Outlook Conference, which will be, uh, December 11th in the Pastides alumni center. And we're gonna talk a little bit more about that because with me today is Dr. Joey Von Nessen, who is a research economist in the Moore School. And before we went to break, you were talking about this relationship with the South Carolina and Germany and the foreign direct investment. South Carolina receives foreign direct investment to the level that we're the fifth highest recipient of foreign direct investment in the nation. And so when we think about the, uh, engagement we have with our international counterparts, it's a big deal to start looking at like, okay, who's bringing money in and what are those businesses doing, and what are they building here in the state? So share just a little bit more about this, the, uh, the automotive industry, and of course we know about the BMW investment up in Spartanburg and kind of how that has paid dividends over years for South Carolina. You mentioned Mercedes, so just kind of riff a little bit on that as far as the automotive industry is concerned.
Joey Von Nessen (10:10):
Sure. Well, Germany is certainly part of that, but more generally, if we, if we kinda step back for a moment and look at a 30,000 foot view, south Carolina's economic growth over the last 10 to 15 years has primarily been driven by export oriented manufacturing. Meaning that companies have been very interested in locating in, in South Carolina manufacturing goods here, so that they can ship them not only to customers in the United States, but also all over the world. And South Carolina is really an ideal location from that, for that from a geographic standpoint, because most people don't realize that the bulk of the population in the United States actually lives east of the Mississippi. About two thirds of our population. Uh, and a lot of people don't realize how concentrated the US population actually is. And if you look more broadly at the migration patterns that we're seeing, more and more people are migrating to the Southeast, and we're going to see more population growth in this region of the country than any other over the next, over the next 30 years or so. And so when you consider that an increasing percentage of the US population is located in the East, generally speaking, then if you're a manufacturer, once again, South Carolina and the Southeast more generally becomes a very attractive geographic location to place a, a facility where you can manufacture, distribute goods to the US customer base and ship through the port of Charleston to be able to access global markets. And so that's a major competitive advantage that we have. Uh, and there are others as well that we can talk about, but that is a baseline for why we've seen so much manufacturing growth in the Southeast in general. And in South Carolina in particular. We've actually been number one in growth in the advanced manufacturing industry over the last 15 years, uh, compared to all other southeastern states. Uh, and that includes the automotive industries.
Kasie Whitener (11:56):
Sure.
Joey Von Nessen (11:57):
As we've been talking about. But advanced manufacturing more generally, uh, is a really an informal term that we hear used a lot, but it primarily refers to the automotive industry, also the aerospace industry and the tire industry, not just the manufacturers, but also the large supply chain that has cropped up around those three sectors. And that's really been a major, uh, series of wins for South Carolina. And this industry has been really driving our growth over the last 15 years and is likely to continue to do so. As we move forward.
Kasie Whitener (12:26):
We think about some of the investments that we've made in terms of infrastructure. Uh, we think about the ports that are, you know, built up to be able to handle the kind of volume and traffic in and out, uh, that will send these goods overseas, but also will receive the things that we need to be able to manufacture. And then on top of that, we've just, they've just announced another investment in I-95 South, right there at the Georgia border. Uh, the.
Joey Von Nessen (12:47):
Yes.
Kasie Whitener (12:48):
The interstate capabilities here, right? With I 77 coming right down through the middle of the state, 95, up the east side of the state, 85 down the west side of the state. Like South Carolina does have these, uh, arteries, if you may like to, to get those products out into the world. I 20 down through, um, Augusta. So we do have, infrastructure wise, we have, we've got more investments to make, obviously, but there's a chance here for South Carolinian companies to be building product well beyond what we need in South Carolina, and then getting those products very quickly to our friends in the sortheast and our friends in the southeast where, you know, like you said, we're we're positioned right there in the middle, um, to, to really be a good location for that.
Joey Von Nessen (13:27):
Exactly. And companies say this explicitly when they are asked why they are locating in South Carolina, there are two primary competitive advantages that we have that companies are talk about all the time. Publicly. Infrastructure is one of them, exactly as you mentioned. And that's both to distribute goods in the US as well as as abroad, and to import materials as needed as part of the manufacturing process. Uh, the other is, is workforce development. And, and we, we can talk about that as, as well. But circling back to infrastructure, uh, and the ability to access a broad consumer base, just a quick, uh, example, numerical example to really illustrate the point. Uh, if you look at the population concentration within the Southeast, and you can actually look and see how many people that you can access within about a one day drive time. So if you think about a truck driver's perspective, for example, um, and how, you know, their circle of, of reach from South Carolina, turns out you can reach about 67 million people.
Kasie Whitener (14:25):
Wow.
Joey Von Nessen (14:26):
Within an eight hour drive from South Carolina. Go down to Florida. Of course, Florida's population far larger. They're about four times as large as South Carolina. So we have about five and a half million people living here. Florida has right around 20 million. But it turns out that within an eight hour drive of Florida within the, the PO at from the, the central point in Florida where you can access the most amount of people in the least amount of time, turns out you can only access about 33 million people in an eight hour drive. So, despite the fact that their population is four times higher, you can only reach about half the number of people within an eight hour drive. Why is that the case? It's because South Carolina is more centrally located within the broader southeast Florida is, is not even though they themselves are larger. Right. And so that just illustrates the, the geographic importance of South Carolina's location really as at the very center of this growing population base in the Southeast. So, again, makes, makes it very attractive for, for companies and also makes continued investments in things like infrastructure. Very important. 'cause we want to build on that competitive advantage that we have.
Kasie Whitener (15:28):
I mean, I think that the word competitive advantage is exactly perfect. It's this geographic location. We didn't do anything to get that geographic location right? Like we just happened to be in South Carolina. It just happens to be the state that our forefathers built for us, right? But at the same time, when you recognize that you have that opportunity, then you start thinking, okay, from an economics perspective, how do we make sure that we're making the most of what we have?
Joey Von Nessen (15:51):
Exactly.
Kasie Whitener (15:51):
And in other conversations with the Department of Agriculture, it's like, okay, well our climate is incredible. Why are we not investing in these particular crops and, and industries where we know that the, our climate is perfect for those kinds of things, right? So when you start looking at what are the natural sort of advantages we already have, and then how do we create the right economic investments to really leverage those natural advantages and, and create, you know, economic mobility here in South Carolina. Um, and I, when I say mobility, I'm thinking about, um, individuals who, who live in the state who are thinking, well, you know, you might have grown up in a particular, um, school district or in a particular, uh, set for a particular career or moving in a a certain direction. But in South Carolina, you can do anything. There's so much opportunity here for anybody coming up through our, through the ranks here in South Carolina. I mean, you mentioned you were at Furman, I went to Clemson, like then we were both here at Carolina. Like, there's just so much opportunity in the state for our citizens, but also for our businesses as well, which I think is one of the things you guys are gonna be tackling here in this economic forum. So let's talk specifically about the event. Give us some details. I got the basics, which is December 11th from 1130 to three 30 at the Pastides Alumni Center. What is the purpose of the economic forum and what do you guys hope to get out of it? Economic Outlook forum?
Joey Von Nessen (17:05):
Yes. The, the purpose of the conference, this is the 45th year that, that we've done it. And, and the, and the purpose every year is to provide the outlook for the state of South Carolina. This is primarily a local outlook, uh, where we are providing information on where South Carolina's economy is likely to head in 2026 at the state and the local level as well. And we are primarily targeting, uh, business audiences, uh, those that are also working for trade associations, those that are working in the nonprofit space and the government space. So again, business and business adjacent organizations, uh, and providing them actionable information about where the economy is headed. And so this is really designed for anyone who can benefit from that type of information, uh, going forward. And there are a lot of things that are changing in, in 2025 that, that we'll talk about. And one of the biggest themes, uh, is actually going to be uncertainty, uh, because that has been the theme for, for 2025. And the question is, is that going to continue into the new year? And what does that imply about where we are headed in terms of growth? Uh, are we likely to see a recession in 2026? Uh, what levels of growth are, are reasonable that we can expect? And we'll, we'll tackle a lot of the broader questions too, surrounding interest rates. How are they likely to change? Where is inflation headed again? What is the likelihood of recession? Uh, we'll have a special, uh, topic surrounding AI and its impact on the labor market. So this is another important topic that, uh, we hear a lot about. There's the, the headline of the, uh, the, the, uh, Armageddon of the, of the jobs market, right?
Kasie Whitener (18:37):
Right.
Joey Von Nessen (18:37):
That AI is gonna replace, uh, everybody. Uh, and so that makes a provocative headline, of course, but the, the question is, how disruptive will it be? In which sectors? How quickly will it be disruptive? What kind of jobs will it create? So there are all sorts of very practical implications of introducing AI into the labor market. Um, and just how disruptive will that be more, more broadly for the average South Carolinians. So those are the types of questions that, uh, that will address at, at the conference.
Kasie Whitener (19:02):
Are we in a 30,000 foot view here? I mean, where's the information coming from? What are you guys presenting? Is it all of our research economists that are part of this? Are you bringing folks in from other schools?
Joey Von Nessen (19:12):
So we will have the 2026 outlook that will be presented by me and our, our director, Dr. Doug Woodward. And then we do have two external speakers that will be coming in, uh, every year that we do have a theme surrounding, uh, what topics are most likely to be affecting the outlook for South Carolina in the, in the coming year. And so this year, AI is going to be one major topic. Um, and so we have Dr. Laura Ullrich coming in, and she is the chief economist from indeed.com. Which most listeners will know is the, the job, uh, the job search site.
Kasie Whitener (19:44):
Sure.
Joey Von Nessen (19:44):
And they have hundreds of millions of records that they get to examine on a day-to-day basis of employers who are posting job openings of workers who are looking to, uh, to bring skills and, and looking to match.
Kasie Whitener (19:56):
Right. I mean, everything from what keywords are they searching to, like what are the words in their resumes and, and what are the job, you know, what sort of common themes are we seeing through these job postings and things like that. How long does a job stay on the listing? How frequently did they get applications? I mean, the data they must have must be incredible.
Joey Von Nessen (20:12):
Oh, it's, it's, it's unbelievable. And, and, you know, I'm, I'm jealous of them, of all that individual data that they can take a look at. Um, but she's gonna be providing some insight into what they are seeing with respect to changes in, in the labor market due to, to AI.
Kasie Whitener (20:25):
Sure.
Joey Von Nessen (20:25):
Uh, and, and where we are expecting to see new job growth, where we're expecting to see less job growth, how it's gonna be disruptive or not in different occupations and, and industry sectors, and just what that means for the labor market more generally. And of course, that in turn impacts what our expectations are about the possibilities of recession or resurgence of growth next year. Uh, the other major, uh, speaker that we'll have is Cody Thacker, who's the Vice President of operations at Scout Motors and Scout, of course, coming into to Blythewood the, the biggest investment that we've seen in Richland County's history. And so he's gonna provide more, uh, practical insight as to what the timeframe looks like on that investment, how quickly they're gonna be scaling up, uh, what that process looks like. And talking more generally about how manufacturing is evolving in South Carolina and globally as we see AI and robotics introduced into the manufacturing process. We're seeing, of course, the transition to electric vehicles, which is, uh, been kind of a, a bumpy transition and has a lot of, of, of changes that are ongoing. And so just again, where are we and what does that look like over the next several years?
Kasie Whitener (21:30):
Major investments in the future. We'll be right back.
Kasie Whitener (21:50):
Welcome back to Moore Impact, Kasie and Joey here talking about the upcoming economic outlook event that's gonna be held at the Darla Moore School with our research economists coming forward and saying, this is the, these are the things we're seeing. These are the trends we're looking for, um, having indeed come into and talk about jobs and employment and what job listings they're seeing in that tremendous amount of data that they must have access to and visibility to. And then having Scout Motors come in and talk about what they see as maybe the challenges that they're facing, but also maybe how they're following their, their plan, um, that was originally agreed upon with, uh, with Richland County. Can we talk about the, this, uh, the impact of these kinds of investments? I wanna talk about the tariffs, I wanna talk about um, the current administration policies, and, and you mentioned the word uncertainty seems to be the name of the game these days. So what does an, an economic researchers say when they see all this uncertainty and are, how do you make sense of numbers if there aren't any really consistent trends that are happening? There's just this sort of up and down volatility?
Joey Von Nessen (22:50):
Well, we have to step back and look at a broader view, and that's gonna be true on any, any metric that we're looking at. So if we take the tariffs, for example, a lot of back and forth, as everybody knows throughout 2025, and, and really the biggest source of, of uncertainty, um, not just about the and and uncertainty really in a sense a, a bigger, uh, having a bigger impact than the tariffs themselves. Because when businesses don't know what tariff policy is likely to be, it makes them, uh, it makes it harder for them to plan looking ahead. So you look at manufacturers who are trying to make plans for 12, 24, 36 months out, and if you don't know what the, what your cost structure is going to look like and how that's gonna affect your, the market environment, uh, then you tend to go into wait and see mode and just say, you know what? I'm just gonna hang back, not gonna make any major investment or hiring decisions.
Kasie Whitener (23:36):
Right.
Joey Von Nessen (23:37):
And, and that can slow growth. And, and we've seen that, we've seen a slowdown in the US economy, uh, in in 2025. But,
Kasie Whitener (23:43):
Sorry, really quickly, I just wanna, so, uh, I mentioned that entrepreneurship class was working with the different companies. There's another one that was working with Green Tech Solutions. And, uh, even Green Tech was telling us that they have this, uh, it was a purchase order from the state of Georgia to do all this, uh, these solar panel installations. So they went ahead and purchased all these solar panel installations to meet this purchase order. And now there's been a hold on this, even the government purchase to, to invest in this green technology or in these solar panels, uh, these solar panel projects. So we're also seeing some of the investments that were made before these tariffs went into effect are on hold, and it's people holding inventory trying to figure out, is the project gonna go forward or is it not?
Joey Von Nessen (24:22):
Yes, exactly. And we, we've seen a lot of that. And with the inventory that you're talking about, there is a, uh, if, if any listeners follow the, uh, the, the GDP data, uh, the, they will know that we saw a spike in imports in the first quarter of this year as many businesses were trying to get ahead of these tariffs. Uh, imports then went down in, in the second quarter. Um, and businesses don't want to pass any cost increases. They see onto consumers because they recognize that consumers are still struggling with the effects of inflation over the last, uh, five years or so.
Kasie Whitener (24:53):
Right.
Joey Von Nessen (24:53):
And so they are very sensitive to price increases. So businesses are trying to, the extent that they can shield consumers from these tariffs, and one way they have been able to do that is to stock up on inventory, which they did in the first quarter before a lot of these price effects went in, into, into, uh, into effect. And so they have been able to basically sell and produce based on these previous, uh, prices. But that's not gonna last forever. Right? So eventually these prices are gonna be passed on to consumers. And what we've seen so far in 2025, again, stepping back from the individual tariffs and looking more broadly, uh, the effective tariff rate in the United States has gone from about 2.5% at, at the start of this year to just over 8% now. And that means that if you look at all imports coming into the United States, uh, as, as in terms of the dollar value, uh, what is the effective tariff rate on everything? And it's about 8.5%, uh, again, up from, from 2%, which is significant, but not perhaps as dramatic as, as people might have expected. We've seen estimates between 17 and upwards of 20% but there's a key difference. The reason a lot of those numbers are higher that you typically see in the news is because they don't take into account the fact that, uh, there are a significant percentage, uh, percentage of our imports that are not subject to tariffs.
Kasie Whitener (26:11):
Okay.
Joey Von Nessen (26:12):
So those are all zeros, right?
Kasie Whitener (26:13):
Right.
Joey Von Nessen (26:14):
And so those bring down that number when you see these higher numbers of up to 20% for the average tariff rate, that's only looking at goods that have a tariff that that, and so it just throws out all those zeros.
Kasie Whitener (26:25):
Right.
Joey Von Nessen (26:25):
But it's important to look more broadly across all imports into the United States, because that gives us some insight into how it's going to impact inflation and broader growth. So again, still a significant increase, but not as dramatic as a lot of these headline numbers would, would suggest. And that's why the economy has been very resilient, uh, particularly in South Carolina, uh, to this uncertainty. We have seen a slowdown in growth, no question about that. But we've still seen positive growth in 2025. So, uh, while the tariffs have had an effect, uh, it hasn't been as, again, as, as dramatic as some of these headline numbers sometimes seem to suggest.
Kasie Whitener (27:01):
I like that you mentioned the broader approach. Like when we start thinking about how does an economist, how does it, how do we look at the big picture? It's not just necessarily about, uh, this, it is South Carolina, but it's not just necessarily about 2025, it's sort of year over year or over decades. Are we looking at like trends that have come and gone over the course of decades, and then not just a single sector, like not just the automotive sector, but like across the whole spectrum of sectors, because they're all, there's all this interplay between all these different supply chains and between, you know, you might be working in the, in a particular sector, and so any, you know, downturn in that sector would affect you as an, as a breadwinner. Uh, but then you're spending your money in another sector. So any uptick in that sector is gonna be affected as well.
Joey Von Nessen (27:47):
Yes.
Kasie Whitener (27:47):
So when we think about how interconnected all of these prices are, just wages and expenses, all of those things together, it is important to have kind of a big broad overview of it and recognize what the whole big picture is saying to us.
Joey Von Nessen (28:00):
Exactly. And South Carolina's economy has continued to do fairly well in 2025, but to your point, it, it really depends on the sector. 'cause you can zoom out or zoom in. If you zoom out. We're still doing fairly well if you zoom in. There's a big difference in the good sector and the services sector largely because of, of the tariffs that we've seen this year. And the bulk of our growth in 2025 has actually come from the services sector. Uh, because when you look at sectors that are touched either directly or indirectly by international trade, these are gonna be things like logistics, transportation and warehousing, manufacturing, retail trade. All of those sectors have seen fairly weak growth in 2025 compared to the service sector, which has done, uh, very well. And that's been led by healthcare, uh, by leisure and hospitality, other professional services. Um, and so if you are working in the services sector or our serving the services sector in terms of, uh, or clients in, in, in this sector, versus if you're working in the good sector, you may have had a very different experience and have very different opinions on how the economy is doing. So it's a very bifurcated market right now. Sure. Uh, between the goods and services sector. And the question is that going to last into 2026? Again, another, uh, another question we'll be, we'll be taking a look at, because that bifurcation has been, um, certainly pronounced this year. That's been true at the state level. It's also been true at, at the national level.
Kasie Whitener (29:21):
The big buzzword in recent elections was affordability.
Joey Von Nessen (29:24):
Right.
Kasie Whitener (29:24):
And, and I think that when we're talking about how much, you know, whether or not you've got job instability because your sector is sort of not growing as quickly. Yes. And then you've got prices going up in another, so your expenses are going up on the other side, individuals are looking at this uncertainty, this instability. And the question is, are things getting less affordable? Are wages stagnating? And then how long can we expect that to occur?
Joey Von Nessen (29:48):
And that comes back to the inflation question because if we look overall since 2020 and just compare the total increase in inflation, total increase in prices versus total increase in wages, uh, we find that consumers are on average still, still down, they've still lost, uh, purchasing power compared to where they were on the eve of the pandemic. And, uh, depending on the time period that you look at, um, overall, to put some numbers on it, uh, prices have risen by, uh, about 28% or so since 2000, since December of 2019. Uh, wages have only increased by about 24 to 25%. So that's a pretty big gap when you, when you look at that and consumers feel that, of course they're not doing that calculation, but they see it in the grocery store.
Kasie Whitener (30:31):
Sure.
Joey Von Nessen (30:31):
They see prices rising when they're buying things online. Um, and they know that their wages aren't increasing as fast, the dollar isn't going as far as as it used to. So they're very sensitive to that. They recognize that, that this is happening. And so if the extent to which we see inflation continue to tick up can limit the ability for us to basically make up for that lost purchasing power, the good news is that wages are now rising faster than prices, and they have been for a, a little over a year now. So we're slowly clawing back that lost purchasing power. But we are still a long way from getting back on par to where we were on the eve of the pandemic. And again, to the extent that inflation ticks up, uh, that's going to limit the, the pace of that recovery. And so that's the big question is to as to whether we're going to see inflation tick up next year or not, uh, and what we can expect, um, because again, that impacts consumer spending. If we don't see consumers recover that lost purchasing power, they are more likely to cut back. And that can have a, an impact on economic growth.
Kasie Whitener (31:35):
Right.
Joey Von Nessen (31:35):
Uh, the other, uh, the other factor when looking at consumer spending is just to recognize that it's the biggest single contributor to, to GDP. So it's, it's all about the consumer at the end of the day. Right. When we're looking at, at growth, uh, that's where you have to start. About 70% of our economy comes from consumer spending. So if the, if, if the consumer isn't happy, uh, that's not gonna necessarily translate into, uh, into good news. So it's really important to understand consumer spending trends and what drive them.
Kasie Whitener (32:01):
Well and concern about losing jobs as well.
Joey Von Nessen (32:03):
Yes.
Kasie Whitener (32:03):
I mean, I think that's the other part of it is if you're watching your sector, uh, not grow as quickly, right, or it's shrinking even, um, then you're worried about your job, your job security, and whether or not you're gonna have that money to be able to spend Thanksgiving, Christmas in January. Am I still gonna have employment moving into 2026? And so of course you wouldn't go out there and buy yourself a brand new car or a brand new, you know, pre-lit Christmas tree, you know what I'm saying?
Joey Von Nessen (32:26):
Yes.
Kasie Whitener (32:26):
These goods that would be sort of driving that economic, it's like, well, let's pull back just a little bit on groceries. We're not gonna be shopping in bulk for the next few weeks. We're gonna just be buying what we need. Uh, and, and that makes sense if people are uncertain about their, uh, own employment future. And so I think those employment numbers are really critical as well. And of course, we missed a couple of reports, uh, during the government shutdown. So are there, is there information or a way that we can, uh, you know what, we're gonna run to break here in about 45 seconds, so I won't ask you like a big long question about this. I just wanna know if this summit that you guys are holding on December 11th is gonna have a sense of the different levers that the Federal Reserve can pull to control to try to control inflation. And whether or not those numbers are going to give us an indication of what we can expect in 2026. I mean, do you think by December 11th we're gonna have a pretty good path to predictability?
Joey Von Nessen (33:16):
Well, we'll certainly have more data available by then. Of course, the, the BLS now, uh, coming back and is gonna begin releasing reports again, starting this week actually on, on Thursday. And we have private sector data that can help with that as well. So we will be able to provide some guidance as to, uh, what the Fed is looking at in terms of making those decisions. And that will help us really get some insight into what we can expect for next year and, and how they're going to affect the outlook for 2026
Kasie Whitener (33:43):
More with Joey Von Nessen, when we come back on the other side, we got one segment to go. It's Moore Impact, don't go away.
Kasie Whitener (34:14):
Alright. We're back for a final segment with Dr. Joey Von Nessen, who is a research economist at the Darla Moore School of Business. This is Moore Impact. I'm Kasie Whitener, your host, and our goal is to bring our economists, our researchers, our practitioners out of the Moore School and into the regular street scenario here to talk to the general public, uh, through MakethePointradio.com and 100.7 the Point locally at 9:00 AM every Tuesday morning. Um, thank you to Kevin Cohen and the Point, and thank you also to Julia Moulton, who is our executive producer for the Moore Impact Podcast, who will take all of this that we're having this conversation and put it up for our podcast listeners as well. So, um, a little quick little shout out to our, uh, producers there, but also to say, we've been talking about this economic forum coming up on December 11th, uh, with Joey and his team, and I'm asking some of the questions that are actually on the website. If you go to sc.edu and you just put in Economic Outlook conference, you'll find it 2025 Economic Outlook Conference, and you can see all these questions that are there. And these are fascinating. What indicators are most important to watch to assess the likelihood of recession in 2026? Like, how can the economists tell us what we should be looking for, right. With the rapid adoption of ai? Are we on the verge of a sizable increase in unemployment? I mean, we already saw these massive layoffs in October. A lot more job loss than people expected.
Joey Von Nessen (35:30):
Yes.
Kasie Whitener (35:30):
I'm sure that your guests from Indeed will be able to speak to that. Um, new job postings, things like that are all kind of indicators of like, are people still hiring? There was a surge in like AI related hiring, and then there was this, you know, pullback from AI related hiring. There's just been a lot of uncertainty.
Joey Von Nessen (35:46):
Definitely. And, and uncertainty is, as we talked about before, really the, the theme of 2025 and, and in the labor market, it's, it's, it's been an interesting year. 'cause I, a lot of economists have used the term a no hire, no fire economy, which I think is fairly accurate in terms of what we're seeing at an aggregate level where hiring rates have slowed in 2025. Again, no question about that. There are all sorts of data that we can look at that, that, that show this, but also layoff activity has been very low. Sure. Um, and so if you actually look at things like unemployment insurance claims, which is a good, uh, leading indicator for unemployment, uh, because it gives us a sense of real time layoff activity, uh, layoffs are no higher overall today than they were a year or two years ago. So, uh, even though hiring is down, we haven't seen an uptick in, in layoff activity. So we are seeing very stable activity in the labor market in 2025. And again, the question is how does that change in 2026? Do we continue to see it this way? Is job or is hiring going to pick up? Is it going to, uh, continue to, to slow? Uh, and will that put us into a recession? So, uh, we'll talk about leading indicators that can give us some insight there, uh, in, into the labor market as well as more generally getting back to, uh, driving consumer spending, which we talked about before, which is the, uh, really the single biggest metric that that drives the economy.
Kasie Whitener (37:13):
Right.
Joey Von Nessen (37:13):
So we wanna know what's consumer spending doing. Uh, it ha it's been slowing down in 2025 as well. Uh, but is it gonna slow further? And how can we, how can we know? How can we predict it? What indicators give us some insight into where those trends are headed. And again, why, why is this important? It's because we wanna know where the economy is headed. And if you are working in any business, if you are looking to make strategic plans at, at a business or a personal level in 2026, it's important to have a general sense of where the economy is headed and we can help provide that perspective.
Kasie Whitener (37:46):
So in my strategy class, we would call this, uh, stability strategies, right?
Joey Von Nessen (37:50):
Yes. Love that.
Kasie Whitener (37:50):
Which is the no hire, love that no fire. I love that. We're, we're just trying to maintain stability here. Our company is just trying to not overextend and, and see a loss, but we're also not trying to contract and try to save money necessarily, but we're not, we're not quite that pessimistic. Right. From a stability perspective. Um, the other word I've been hearing around is stagflation, which is this idea that like, things are just sort of stagnant. We're just not really moving one way or the other. And so as we were off the air, I was asking you like, what are some of the, we know that the Federal Reserve has, has levers they can pull to try to push the economy in one direction or the other. What are these, who's got the power to, to push something in one direction or the other? And are those choices on the table? I mean, are there people that are sitting around going, Hey, I think we ought to do this, or ought, ought to do that? Or is everybody in, you know, stability mode where it's just like, let's just wait and see what's gonna happen here? Um, because I think that for people who are looking for a job right now, it's frustrating to think that like, Hey, I've put out 200 resumes, but I'm just not getting any calls.
Joey Von Nessen (38:48):
Yes.
Kasie Whitener (38:48):
Because even though the jobs are posted, they're not actually planning to hire until when. Right. Whether it's, and then it's the holidays and then it's the end of the year. Like, nobody's gonna do anything until January. So here we are a second week in November, and if you don't have a job, you can expect to be in that situation until January. That's a really depressing scenario for people who are, who are feeling like, I get it that the companies are wanting to be stable, but man, I need work. You know what I mean?
Joey Von Nessen (39:12):
Right, right. And, and it really depends on which industry we're looking at. Of course, different industries are gonna vary on, on those types of hiring scenarios. Some are doing more than others. Again, if you look at the services sector, it tends to, uh, be doing much better in terms of employment growth in the good sector in 2025. So it, it, it definitely is sector specific. Um, but circling back to your first question around the Fed and, and policy tools, uh, the Fed has very specific policy tools that they can engage in, um, that can change the direction of, of growth. But, uh, but they are very limited because the Federal Reserve has a dual mandate. Uh, they have two things that they're trying to balance. Number one, they wanna maximize employment, so, or minimize unemployment. Uh, and the other thing they wanna do is maintain price stability. So they want to keep inflation contained. And so they do that primarily through, uh, changing short-term interest rates. When interest rates go down, that provides a stimulative effect for the economy. So that can raise inflation, but it can also generate more hiring activity. And so depending on where the biggest risk is to the economy, are we running inflation too high, our prices rising too fast, or are we not seeing enough job growth. And right now, the challenge is that you can make a case that both are, are a problem, that inflation, while it has come down a lot in the last several years, uh, we, you know, we forget inflation was above 9% back in 2022, uh, which was at a 40 year high. So inflation's currently at 3.0%. So a marked improvement, again, as we talked about before, wages are now growing faster than prices. But having said that, inflation has ticked up in 2025, it's, it's gone up about half a percentage point. And so it's not trending in in the right direction. And so that's one risk that the Fed is trying to, to examine. And then on the other hand, we've seen a slowdown in the labor market. So the slowdown in the labor market would generally, uh, cause the Fed to wanna look at lowering rates, but the fact that inflation's moving in the wrong direction suggests that well, maybe not. And so what we are anticipating over the next several months is more discussion surrounding where's the bigger risk to the economy? Is it from higher inflation in 2026, or is it going to be from a steady decline in, in the labor market? And that's something they're gonna be talking about. And that's something we'll talk about at, at the Outlook conference as well, in terms of which risk is more likely next year. And so where do we expect the Fed to proceed with policy as a result of where those perceived risks are? And this is very unique, um, in terms of what we've seen from the Fed, or what the Fed has had to deal with in, in the last, uh, in the last several years. So normally, uh, they are focused on one, the labor market or inflation, uh, but the fact that they're really having to balance because both are challenges, that's somewhat unique and, and certainly unique in, in Jay Powell's term as chair. Uh, he hasn't had to deal with this before. And where, where both are, are really major risks and, and having to establish which is the higher risk.
Kasie Whitener (42:13):
So we have monetary policy, which is what we've been talking about with the Federal Reserve, and their role as a, uh, sort of meant to be an independent kind of, um, referee saying, we're gonna move in this direction or that direction and, and, and try to be independent of political influence. But the other half of this conversation is about fiscal policy.
Joey Von Nessen (42:31):
Right.
Kasie Whitener (42:31):
And so the, the opportunity there, or the, or the desire there to make things better for constituents to, to try to find short term, especially as we're going into another election year next year, it is a midterm election year, but it's still an election year to make short-term, um, decisions or make some short-term investments or try to figure out how the fiscal policy can engage here is also something we're gonna be seeing. Does, is your conference gonna address that? Or is are we gonna focus on the monetary policy side?
Joey Von Nessen (42:56):
So we'll talk about the likelihood of fiscal policy having, uh, or, or the types of fiscal policy that we may see in, in 2026, that, that is more of a political question and we'll talk broadly about that. Um, and, and especially how the, uh, how the expectations of changes in fiscal policy could affect what the Fed decides to do and, and how that combination could affect our, our outlook. So looking back, uh, just to give an example of, of that is the stimulus packages that we saw in 2020 and 2021, $6 trillion worth of stimulus. Um, and that generated very high levels of demand and was a driver of this high inflation that, that, that we saw. Um, and the Fed, of course had to, to react to that. So the Fed, uh, very much is looking at the potential for changes in fiscal policy. They don't typically comment on fiscal policy or say.
Kasie Whitener (43:48):
Right.
Joey Von Nessen (43:48):
Uh, you know, go in one direction or another, or
Kasie Whitener (43:50):
Meant to be politically independent.
Joey Von Nessen (43:51):
Exactly. But they nevertheless take that into account when they're making their decisions. 'cause fiscal policy obviously impacts the economy.
Kasie Whitener (43:57):
Sure.
Joey Von Nessen (43:58):
And if acts, how they react to it. So even though they don't endorse or repudiate any particular policy, they are definitely responding to, to what is happening as they're, uh, looking to, to meet their, their, uh, dual mandate as well. Right.
Kasie Whitener (44:12):
Um, I'm curious about the, uh, of course, I wanna give people the details again, of the Economic forum or the economic Outlook Conference, uh, December 11th from 11:30 AM to 3:30 PM in the Pastides Alumni Center can, uh, just the general public register for this and, and get tickets for this and come and attend it.
Joey Von Nessen (44:29):
Yes, absolutely. Uh, you can go online, uh, and you can just go to Moore School, uh, .sc.edu or you can just Google University of South Carolina Economic Outlook Conference and it'll be the first hit. So it's, it's easy to find, uh, and yes, we encourage everyone to come out to, to register. Uh, you can get a ticket on the, on the website, and you can also come virtually, uh, if you would like to, to do that as well. So you can sign up, uh, and it will be, uh, uh, it will be streamed on online. So in both cases, uh, definitely, uh, make plans to, to participate. If you do come in person, uh, we start out with a, with a lunch, with a, a buffet lunch networking event for the first hour. And then the program starts at 1230, uh, and extends through through three 30. So whether you're there in person or there virtually, we, we encourage everyone to come out. It's gonna be an exciting day. Uh, we're gonna learn a lot about our, uh, our, our expectations for 2026 and where South Carolina's Economy is headed.
Kasie Whitener (45:23):
The Economic Outlook Conference 2025 on December 11th. Um, thank you so much Dr. Von Nessen for being here.
Joey Von Nessen (45:31):
My pleasure. Thank you for having me.
Kasie Whitener (45:32):
This has been more impact. When you learn more, you know more, when you know more, you do more. Thanks for listening.