Over the past 21 months, the US Federal Reserve has consistently raised interest rates in an attempt to cool the economy and curb inflation. The North Carolina and US economies are showing signs of slowing, although a return to inflation is still out of the question.
„The strong GDP growth we saw in the first quarter did not last,” he said John ConnaughtonProfessor of Financial Economics at UNC Charlotte Belk College of Business. „We saw second-quarter growth decelerate to a modest 1.1%, and will show continued deceleration in late 2023 and early 2024.”
Connaughton, who released the North Carolina Economic Forecast fourth-quarter report on Thursday, Dec. 14, looks at two big questions for 2024. „First, will there be a recession, and second, will the Federal Reserve control inflation?” he asked. „The recession question is complicated by the fiscal policy of Congress and the president, and the Fed and its effort to slow the economy by raising interest rates continue to struggle.”
On Wednesday, December 13, the Federal Reserve kept its key interest rate steady and signaled that three rate cuts are possible in 2024.
2023 Gross Domestic Product Analysis
In 2023, North Carolina’s real (inflation-adjusted) GDP is projected to increase 2.5% over the 2022 level, marking the third full year of growth since COVID-19.
Connaughton expects productivity growth for 12 of the state’s 15 economic sectors by 2023. Sectors with strong expected growth rates include:
- Information: 11.1%
- Education and Health Services: 6.7%
- Transport, Warehousing and Utility: 6.7%
- Retail Trade: 6.4%
- Hospitality and Leisure Services: 4.2%
Three sectors are expected to experience declines in 2023:
- Agriculture: -15.9%
- Mining -10.6%
- Other Services: -0.7%
2023 employment
Out of 14 non-agricultural sectors in the state, 11 sectors are projected to increase employment by 2023. Sectors with the strongest expected employment gains are:
- Mining: 5.7%
- Education and Health Services: 4.9%
North Carolina’s employment is projected to reach 4,947,300 persons by December 2023, a 2.0% increase over the December 2022 employment level. The state is expected to add 94,800 net jobs by 2023. The state’s unemployment rate fell in mid-2023, but rose to 3.4% in October, the report said.
2024 preview
Looking ahead to 2024, the report predicts moderate growth. North Carolina employment is expected to add 53,400 net jobs to reach 5,003,700 persons in December 2024, a 0.9% increase over the expected December 2023 employment level. In December 2024, the state’s unemployment rate is expected to be 4.0%.
North Carolina’s real (inflation-adjusted) GDP growth rate is projected to increase by 1.9% to 2024. Fourteen economic sectors of the state are expected to increase production.
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