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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2022 Annual Theme: Stakeholder Capitalism
Market-Based Solutions to Vital Economic Issues

economic outlook


Employment growth has remained exceptionally strong this year, and September is expected to be another healthy month. Join us for the Kenan Institute’s virtual press briefing at 9 a.m. EDT this Friday, Oct. 7, as we discuss the Bureau of Labor Statistics’ fresh employment report and how it may affect the Federal Reserve’s aggressive reaction to inflation.

Economists and investors traditionally see uncertainty as a bad thing that suppresses growth and valuations, but new research shows that downstream uncertainty from customers in the U.S. supply chain can foretell expansion for firms and the economy.

Kenan Institute Executive Director Greg Brown discussed the Federal Reserve’s next move after the Sept. 2 employment report showed slowing but still strong job growth. Brown predicted that the Fed, to protect its reputation as an inflation fighter, would more likely overshoot than come up short in using higher interest rates to tamp down rising prices. He also answered questions from the media on how the global nature of inflation limits the Fed’s effectiveness as well as what can be expected for local and North Carolina labor markets.

The Fed is threading a shrinking needle in its attempts to engineer a soft landing for the U.S. economy. Join Professor Greg Brown for a briefing built on the latest employment data and financial market signals, followed by his answers to questions from the audience.

The cost to rent a one-bedroom apartment in Raleigh and Durham jumped 6% in a month as the area continues to attract new residents, according to a WRAL TechWire report. Rising prices are an indication of an undersupply in homes for rent or sale, said institute Chief Economist Gerald Cohen, adding that this “suggests that the risks of a significant drop in housing is quite low.”

Small-business owners say they’re just beginning to recover from the sudden blow that hobbled many of them during the early 2020 pandemic restrictions. Now mixed economic messages have them wondering what to do next, according to a Washington Post story. “There is so much that’s up in the air, and uncertainty affects small businesses much more so than it does larger ones,” said institute Director of Research Paige Ouimet.

The U.S. economy added 528,000 jobs in July, an unexpectedly strong number that Kenan Institute Chief Economist Gerald Cohen discussed during the Kenan Institute’s economic briefing Aug. 5. Cohen also answered questions from the media about the shifting balance of power between employers and employees, the labor force shortage and what the news means for North Carolina businesses.

July employment numbers suggest that the economy isn’t heading into recession but instead is accelerating as the third quarter begins, Chief Economist Gerald Cohen said during the institute’s monthly economic briefing Aug. 5. “It’s still post-COVID recovery, but … we’ve surpassed the pre-COVID levels by 32,000,” Cohen said, as reported by the Triangle Business Journal.

Three institute-associated experts provided analysis for the July 30 edition of WRAL-TV’s “On the Record” news program. In a segment on dwindling child care options in the Raleigh area, Director of Research Paige Ouimet talked about how child care access affects the ability of women to work.

GDP, the broadest measure of economic output, contracted for the second straight quarter, stoking fears that the economy is already in a recession — and has been since the beginning of the year. But the guts of the GDP report coupled with continued strong job growth and decent consumer spending suggest that the expansion remains on track. While the official arbiters of recessions are likely to agree with me — they don’t look at GDP but rather measures like job creation — what really matters to households and businesses is whether their spending power or foot traffic is drying up.

Employment numbers have remained strong recently even as other economic indicators have faltered. We’ll discuss whether the trend continues when the Kenan Institute’s economic briefing returns at 9 a.m. EDT this Friday, Aug. 5, after the Bureau of Labor Statistics releases its monthly jobs report.

Too much or too little? Asked by German network Deutsche Welle about the Federal Reserve’s 0.75 percentage point interest rate increase July 27, Chief Economist Gerald Cohen called it just right, given that a hot job market is now accompanied by high inflation.