Monday, August 12, 2013

PNC: Charlotte payrolls rising more quickly than U.S.

National economic figures haven't looked all that great of late, but here's some good news: Charlotte should outperform the U.S. as a whole, a new outlook from PNC Financial Services says.

Payrolls in the Queen City are growing "much faster" than the country overall after a tepid start to the year, the report says. Job growth continues to be grown by business and professional services, also known as office jobs.

Finance, however, "remains a weak spot," PNC reports. "Locally, the industry is restructuring and although job loss has not been disastrous, gains will likely be inconsistent in the quarters ahead."

A few other highlights:

ON JOBS: Though Charlotte is adding jobs, the unemployment rate is still stubbornly high because in-migration is all but cancelling them out.

ON INCOME: Wage growth is finally accelerating, but it should still take another few years to make up for the median household income to bounce back from the loss of high-paying bank jobs that came during the financial crisis.

ON HOUSING: Homebuilding could come back more quickly than elsewhere because of a vacancy rate lower than its peers. The percentage of homes bought by investors, rather than individual homeowners, was 21 percent last year.

INTEREST RATES RISING, BUT NOT ON DEPOSITS: Mortgage rates are up a full point over the past few months, but a new study from says that interest rates paid on deposits are still shrinking. Checking accounts are paying 0.11 percent on average, a decline of 3 basis points over last year, the study finds. Similar tiny returns were found on money market accounts and shorter-term CDs.

Says the managing editor, Casey Bond: "We've seen interest rates on everything from loans to bonds spike in response to recent comments from Bernanke. Unfortunately, Fed policy continues to ignore the need for low-risk sources of growth, and depositors can expect to be screwed for the foreseeable future."

THE OTHER PERSPECTIVE: Of course, from the banks' point of view, this is an opportunity. A new report from SNL shows how banks have been "getting core deposits while the getting is good." Banks like Bank of America have been bringing on money market accounts and, to a lesser extent, checking and savings accounts, that cost next to nothing, replacing higher-cost CDs. Jumbo CDs made up 18 percent of balance sheets in 2007; now they're less than 9 percent.

At BofA, money market accounts are up 11 percent, while large time deposits are down 11 percent, SNL found.

****This is a preview of The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market.****

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