COLUMBIA, S.C. — The economic forecast for South Carolina in 2024 is marked by a continued slowdown, driven by the impact of high-interest rates and inflation, according to University of South Carolina economists.
From the bustling streets of Wall Street to the local businesses on Devine Street, such as Mainstream Boutique, the effects of inflation are palpable.
"We're having to deal with price increases on the back end, which then we unfortunately have to pass on just to pay for the overhead,” said Owner Elliott Bridgers.
Bridgers emphasizes that the higher prices have led to stagnant sales in 2023, noting, "I think consumers are very conscientious about what they're spending their money on."
This scenario reflects a broader trend playing out across the country.
As the Federal Reserve takes measures to raise interest rates and cool the economy, consumer confidence remains low.
"I think as a business owner, you're always going to be dealing with fluctuations in the economy, and you just have to stay ahead of it,” said Bridgers.
The University of South Carolina economists predict persistent challenges in 2024, including inflation, high interest rates, worker shortages, and a drop in consumer spending.
However, there is a silver lining, as Professor Joey Von Nessen notes, "Slower growth is expected for the state in 2024. But our economy remains relatively healthy and continues to benefit from steady consumer spending, strong wage growth, and a robust labor market."
Wages in South Carolina have risen by an average of 15 percent since last year, while inflation has increased by 18 percent.
Housing sales decreased by 23 percent in 2022 and then by 6 percent this year.
Economists attribute the state's slowed growth to a necessary readjustment period for the U.S. economy following its overheating toward the end of the pandemic. Currently, inflation stands at 3.2 percent, well above the Federal Reserve's 2 percent goal.
"We're increasingly optimistic that we could see a soft landing and potentially avoid a recession in 2024,” said Von Nessen.