CHARLOTTE, N.C. – North Carolina saw its fourth year of economic growth since the COVID-19 pandemic, despite Hurricane Helene’s destruction dampening the state’s fourth quarter economy. “Unlike coastal areas, most businesses and households in the western part of North Carolina do not have flood insurance,” said John Connaughton, UNC Charlotte professor of financial economics. “Normally, rebuilding after a natural disaster stimulates the economy, but in this case the lack of insurance could put a burden on small businesses and households and also delay the rebuilding stimulus on the economy.” Real Gross Domestic Product (GDP) is estimated to increase by 3.5% over 2023. Approximately 12 of the 15 economic sectors are expected to grow. Here are the sectors with the strongest growth rates: Agriculture: 22.4% Mining: 9.0% Retail trade: 7.7% Construction: 6.6% Educational and Health Services: 5.4% Nondurable goods manufacturing: 5.1% U.S. Federal Reserve policy is uncertain going forward, Connaughton said. After two reductions in the federal funds rate in the fall, the Federal Reserve is now wavering on rate policy. This uncertainty will likely have only a small impact on 2024, once final numbers are in, but could have greater impact in early 2025, depending on future policy, he said. “We have seen the U.S. unemployment rate rise from 3.3% in May of 2023 to 4.1% in October of 2024,” he said. “As a result of the weakness in the labor market, the Federal Reserve has begun reducing interest rates. During 2025, depending on economic data, the Fed could continue with interest rate reductions by up to another 100 basis points by mid-year. However, if Congress does not begin to control fiscal spending, we are likely to see a return of inflation in 2025, which could disrupt the Fed’s plans.” For 2025, GDP is forecast to increase by 2.3% over 2024 with all 15 sectors expected to increase. The sectors with the most expected growth in 2025 are: Information: 4.9% Construction: 3.1% Mining: 2.9% Hospitality and leisure services: 2.8% Transportation, warehousing and utilities: 2.7% Nondurable goods manufacturing: 2.6% Business and professional services: 2.6%