New NC labor market data: It’s been a really good week for economic news

If you’re in the mood for some good economic news, you’re in luck.

First of all, poverty figures for last year showed some of the impact of federal assistance and stimulus to combat the financial effects of COVID-19. While hardship was still widespread, federal programs like supplementary Unemployment Insurance benefits, an expanded Child Tax Credit, stimulus checks, and rental assistance averted a financial catastrophe for many North Carolina families. Compared to 2019, before COVID-19, around 30,000 fewer North Carolina children experienced poverty last year and the real median income went up.

Sure, you’re probably thinking, but what about inflation putting the screws to North Carolina consumers?

There we saw this week that consumers have gotten something of a reprieve from surging prices. After running red hot through the first half of the year, overall consumer prices have held basically steady for the past two months. As you’ve probably seen at the pump, gas prices have come down significantly over the past few months. The cost of food continued to rise, but at the slowest monthly rate since the end of last year. On the other hand, housing prices continue to go up, a particular challenge for low- and middle-income North Carolinians living in the state’s hottest housing markets like the Triangle and Charlotte.

The big question is whether we’ll be able to engineer a “soft landing” where consumer prices can be reined in without pushing the US economy into a recession. The Federal Reserve signaled that additional interest rate hikes are still likely, which is its primary way of putting the brakes on the economy in an effort to slow the pace of inflation. History tells us that it’s tricky to get inflation under control without an economic downturn, but a recession isn’t a foregone conclusion.

That brings us to today’s state employment figures. North Carolina has continued to add jobs over the past few months, and more people are rejoining the labor market. Even after four interest rate hikes this year and the market bracing for another round later this month, around 145,000 jobs have been created in North Carolina in 2022 and almost 200,000 in the past twelve months.

It’s also encouraging to see more people being able to rejoin the labor market, with around 140,000 more North Carolinians either working or looking for a job compared to the same time last year. The headline unemployment rate ticked up in August, but that’s actually rooted in more people joining the labor market. All that said, a lack of affordable child care, housing, and transportation are still preventing a lot of people who would like to work from connecting to employment, so reducing those barriers is still critical to getting back the share of people working that existed before COVID-19.

None of this dispels concerns over how we manage inflation without tipping the United States into a recession or erases the very real economic pain that many North Carolinians face on a daily basis, but in a time when good news can seem hard to come by, it’s been a pretty darn good week.