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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues



Do employment and wage growth numbers line up with consumer confidence? It's time for a confidence check with Kenan Institute Research Director Camelia Kuhnen during this month's virtual economic briefing at 9 a.m. EDT this Friday, May 3.

Join Chief Economist Gerald Cohen for the institute’s monthly virtual briefing at 9 a.m. EST this Friday, March 8, to discuss the morning's employment report and the latest economic data.

Navigating Uncertainty
Business Resilience

American Growth Project models project that all 150 of the top Extended Metropolitan Areas will see slower growth in 2024 than they did last year and that 56 of them will contract. See what else the data tell us.

Join us for the Kenan Institute’s monthly virtual press briefing at 9 a.m. EDT this Friday, Dec. 8, as professor and former executive director Greg Brown shares his thoughts on where inflation may be headed from here.

An advance estimate shows the U.S. economy growing nearly 5% during the third quarter. Join Research Director Camelia Kuhnen in a virtual press briefing at 9 a.m. EDT this Friday, Nov. 3, for more on this and the morning's employment report.

Join us for the Employability Skills Gap webinar on Oct. 18 at 10 a.m. Dive into the final session of ncIMPACT Initiative's 'Where are the Workers?' series for insights and discussion on workforce needs.

Labor Shortage
Mar 22, 2022

Where are the Workers?

“Every business I enter is looking for employees” was a common refrain in our Carolina Across 100 survey, with 79% of the total survey sample selecting employment/staffing concerns among their top three negative impacts of COVID-19 on their organization. Is the staffing shortage just a function of COVID-19 that will correct itself as COVID abates or are there larger demographic and economic forces at work? The answer is a bit of both.

The jumps in the inflation rate over the last few months have been larger and longer-lasting than expected.  For much of 2022 economic forecasters, including those at the Federal Reserve, assumed that higher inflation rates would be short-lived—or “transitory” using the preferred jargon of the day. Inflation was expected to start shifting back towards the Fed’s 2% target as supply-chain bottlenecks were resolved and a pandemic-induced shift in demand for consumer goods swung back toward consumer services.  Instead, recent inflation prints have set 40-year records and we are seeing more discussion about the possibility of a “wage-price” spiral. 

As we begin the new year, we wanted to highlight five topics, beyond the impact of COVID-19 and related uncertainties, that we believe businesspeople and policy makers will be grappling with in 2022. Throughout the year, we will focus our efforts to provide solutions-focused analysis on these topics as well as a host of others.

The current narrative around the U.S. labor market is a mixed bag. On the one hand, many companies are struggling to find enough workers to return to a semblance of normal operations. On the other, 8 million fewer Americans were employed in April 2021 as compared to February 2020. We asked three experts from the University of North Carolina at Chapel Hill — Christian Lundblad, Director of Research, Kenan Institute of Private Enterprise and Richard "Dick" Levin Distinguished Professor of Finance, Area Chair of Finance and Associate Dean of the Ph.D. program, Kenan-Flagler Business School; Luca Flabbi, Associate Professor of Economics; and Paige Ouimet, Professor of Finance, Kenan-Flagler Business School — to weigh in on the critical issues behind this dichotomy.

The 2020 U.S. economic downturn fueled by the COVID-19 pandemic generated both big losers (such as restaurants and the hospitality sector) and big winners (such as high tech and online retail), leading economic commentators to call the recession “K-shaped.”  As the pandemic evolves in 2021, this K-shaped recovery will go global; though some countries, notably the U.S. and China, are securely tethered to the largest economic booster rocket ever built, a sizable swath of the world will continue to suffer weak growth.

2020 brought an end to North Carolina’s decade-long economic expansion that began in 2010 after the Great Recession. It has now been a year since COVID-19 arrived on U.S. shores, and we can see some changes clearly, while others are just starting to emerge from the haze. It will likely be years before we fully grasp the myriad ways COVID-19 has affected the nation’s and the state’s economies. Now seems like a good time to take stock of the fallout from 2020, the trends we’re seeing a year into the crisis and where things are starting to turn around for North Carolina.