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05.06.24
The first two years of the COVID-19 pandemic brought one whiplash-inducing economic turning point after another: a sudden downturn, followed by a swift recovery and, before long, an overheated economy with widespread shortages and rapid price growth. In contrast, the next two years saw a gradual cooldown as the Federal Reserve raised interest rates, leading to a moderation in economic growth and an eventual slowing in price increases.
Consumer demand has moderated considerably from the early days of the pandemic, when many households were flush with cash and eager to spend. Nationwide, over-the-year growth in real consumer spending slowed from 8% in the summer of 2021 to 3% in March 2024 [Figure 1]. While we don’t have directly comparable figures for overall consumer spending in North Carolina, taxable sales data from the state Department of Revenue, which primarily cover retail goods, show spending growth in our state slowing from 13% to slightly above 0% on an inflation-adjusted basis.
As we reported in February, employer demand for labor has also moderated, with the number of job openings in North Carolina declining to near its pre-pandemic level. A lower number of job openings means that many employers are having an easier time filling open positions, since there’s now less competition for workers. On the other hand, a lower number of job openings also means fewer employment opportunities for jobseekers, but it’s important to note that job availability remains relatively high in historical terms. The Conference Board’s Consumer Confidence Survey found that 40% of Americans reported “jobs are plentiful” in April 2024—less than the 57% recorded at the height of the pandemic economy, but similar to the rates seen in 2018 and 2019, which itself represented some of the most favorable labor market conditions in decades [Figure 2].
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