FORECAST H IGHLIGHTS
• For 2023, NORTH CAROLINA real GDP increased by 2.7 percent over the 2022 level.
• Twelve of the state’s economic sectors experienced output increases during 2023. The sectors with the strongest growth rates were information with a real increase of 12.3 percent; retail trade with a real increase of 9.6 percent; educational and health services with a real increase of 6.5 percent; transportation, warehousing, and utilities (TWU) with a real increase of 5.6 percent; business and professional services with a real increase of 4.3 percent; construction with a real increase of 3.8 percent; and hospitality and leisure services with a real increase of 3.7 percent.
• For 2023, NORTH CAROLINA establishments added 85,800 net jobs during the year, an increase of 1.8 percent.
• For 2024, NORTH CAROLINA real GDP is forecast to increase by 3.0 percent over the 2023 level.
• Fourteen of the state’s economic sectors are expected to experience output increases during 2024. The sectors with the strongest growth rates are mining with a real increase of 7.8 percent; retail trade with a real increase of 6.1 percent; information with a real increase of 5.9 percent; nondurable goods manufacturing with a real increase of 5.6 percent; construction with a real increase of 5.1 percent; transportation, warehousing, and utilities (TWU) with a real increase of 3.7 percent; durable goods manufacturing with a real increase of 3.7 percent; and business and professional services with a real increase of 3.4 percent.
• For 2024, NORTH CAROLINA establishments are forecast to add 60,400 net jobs, an increase of 1.2 percent.
• By December of 2024, the state’s unemployment rate is expected to be 4.0 percent.
total
a state’s
a given year. 3.9 Year-End Seasonally Adjusted North Carolina Unemployment Rates 2021 2022 2023 2 4 6 8 Annual Growth Rates In Real GDP 0 2021 2023 2024f 2025f 2022 2 4 8 2.7 5.8 2.0
GDP/Gross Domestic Product is a yardstick that measures the
output of
economy for
2025f 2024f 3.0 3.6 3.7 -1 -2 -3 -5 -4 2.3 4.0 6 4.0
Quarterly Growth Rates
Current Dollars
2023 Highlights
Total Gross Product
Constant (2012 Dollars)
Total Gross Product
Gross Domestic Product (GDP) reached a level of $766,919.0 million in 2023. Real (inflation-adjusted) GDP increased by 2.7 percent over the 2022 level. This growth in 2023 represents the third full year of growth since COVID-19.
For 2023, first quarter GDP increased by an annualized real rate of 3.4 percent. During the second quarter, GDP increased by an annualized real rate of 1.1 percent. In the third quarter, GDP increased by an annualized real rate of 4.6 percent. In the fourth quarter of 2023, GDP increased by an annualized real rate of 3.8 percent.
Both the North Carolina and U.S. economies seemed to defy the impact of a 525 basis point increase in interest rates as a result of Federal Reserve policy over the past two years. The strong first quarter GDP growth was not sustained as the second quarter growth dropped to a modest 1.1 percent. However, in the third quarter, both U.S. and North Carolina GDP picked up considerably as a result of consumers’ one last fling during the second half of the summer. Overall, 2023 with an annual GDP growth of 2.7 percent was a good year with a strong second half of the year.
For the past two years the U.S. government has engaged in stimulative fiscal policy and contractionary monetary policy at the same time. For fiscal year 2022 (October 1, 2021 to September 30, 2022) the U.S. deficit was $1,376 billion or 5.5 percent of GDP. For fiscal year 2023 the U.S. budget deficit was $1,695 billion or 6.3 percent of GDP. The Congressional Budget Office (CBO) budget deficit estimate for fiscal year 2024 (October 1, 2023 to September 30, 2024) is estimated to be $1,507 billion or 5.5 percent of GDP.
These budget deficits are almost double the 3.0 percent of GDP which is considered the non-stimulative level. During the same period, beginning in March of 2022, the Federal Reserve aggressively increased interest rates (525 basis points in 21 months) to slow the economy down. The question is who will win this battle? It is quite possible we might see a mild slowdown in 2024, but if federal fiscal spending continues unabated the economy may continue to grow, but we may see a return of inflation latter in 2024.
2023 GDP
Agricultural Mining Construction Manufacturing Durable Goods
TWU Wholesale Trade Retail Trade Information FIRE B & P E & H H & L Other Services Government 766,919.0 625,681.9 3,218.9 725.2 25,864.6 88,322.1 38,194.0 50,145.2 26,565.6 32,905.5 36,922.6 31,504.2 125,370.7 95,510.3 53,451.6 22,295.1 12,239.9 74,648.0 2023* Percent Change 7.1 2.7 -23.0 -9.4 3.8 1.1 0.2 1.9 5.6 0.4 9.6 12.3 0.5 4.3 6.5 3.7 -1.7 0.2 * Millions of dollars 8 6 2 0 4
Nondurable Goods
4.6 2023 I 2023 II 2023 III 2023 IV 3.4 1.1 3.8
In Real GDP
2023 GDP S ECTOR A NALYSIS
The chart to the left presents the contributions of each major economic sector to North Carolina’s Gross Domestic Product (GDP). The real (inflation-adjusted) growth rate for 2023 increased 2.7 percent. Real growth rates for each sector (displayed in black type) are plotted on the horizontal axis. Percentages of GDP contributed by each sector (displayed in green type) are plotted on the vertical axis. The resulting rectangles show the weighted importance of each sector’s growth during 2023. All of the sector information presented in the table to the left is based on the North American Industry Classification System (NAICS) definitions.
Twelve of the state’s economic sectors experienced output increases during 2023. The sectors with the strongest growth rates were information with a real increase of 12.3 percent; retail trade with a real increase of 9.6 percent; educational and health services with a real increase of 6.5 percent; transportation, warehousing, and utilities (TWU) with a real increase of 5.6 percent; business and professional services with a real increase of 4.3 percent; construction with a real increase of 3.8 percent; and hospitality and leisure services with a real increase of 3.7 percent.
Five other sectors experienced growth rates, at levels below the overall 2.7 percent GDP real growth rate. These sectors were nondurable goods manufacturing with a real increase of 1.9 percent; finance, insurance, and real estate (FIRE) with a real increase of 0.5 percent wholesale trade with a real increase of 0.4 percent; government with a real increase of 0.2 percent, and durable goods manufacturing at 0.2 percent..
Three sectors experienced declines during 2023. These sectors were agriculture with a decrease of 23.0 percent, mining with a decrease of 9.4 percent, and other services with a decrease of 1.7 percent.
Percent of Total Real GDP Percent of Real Sector Growth 0.5 2023 Total Real GDP Growth 2.7% 0.1 4.2 6.1 8.0 4.1 5.2 5.9 3.5 11.9 19.9 15.2 8.5 1.9 5.0 B&P Services 4.3 E&H Services 6.5 H&L Services 3.7 Other Services -1.7 Government 0.2 FIRE 0.5 Information 12.3 Durables 0.2 TWU 5.6 Wholesale Trade 0.4 Retail Trade 9.6 Nondurables 1.9 Construction 3.8 Mining -9.4 Agriculture -23.0
2024 Highlights
Current Dollars
Total Gross Product
Constant (2012 Dollars)
Total Gross Product
2024 GDP
Gross Domestic Product (GDP) should reach a level of $857,723.5 million in 2024. Real (inflation-adjusted) GDP is expected to increase by 3.0 percent over the 2023 level. This growth in 2024 will represent the fourth full year of growth since COVID-19.
For 2024, first quarter GDP for North Carolina is expected to increase by an annualized real rate of 3.1 percent. During the second quarter, GDP is expected to increase by an annualized real rate of 2.6 percent. In the third quarter, GDP is expected to increase by an annualized real rate of 2.5 percent. In the fourth quarter of 2023, GDP is expected to increase by an annualized real rate of 2.1 percent.
For 2024, there are two big questions. First, will there be a recession and second, will the FED continue to control inflation? The recession question is complicated as fiscal policy by Congress and the President continues to fight the FED and its attempt to slow the economy by raising interest rates. After increasing interest rates by 525 basis points since March of 2022, the conventional wisdom would suggest that the economy should be slowing, or we should be seeing signs of recession. After an incredibly strong four quarters in 2023, the economy seems to be showing signs of slowing slightly. First quarter 2024 U.S. GDP came in at a lackluster 1.6 percent, well below the expected 2.5 percent estimate.
However, while the FED is holding steady on the brakes by keeping interest rates high, Congress and the President are continuing to stimulate the economy with fiscal policy deficit spending. The deficit for fiscal year 2023 was over $1.6 trillion, and the estimate for 2024 is just shy of $1.6 trillion or almost 6 percent of GDP. Deficits of this size in the third and fourth years of economic recovery with the unemployment rate below 4 percent are simply irresponsible. If Congress does not control fiscal spending, we are unlikely to see a recession in 2024; however, we are likely to see a slowing economy and a return of inflation. Without a change in policy, we are likely to see a return of demand pull inflation led, this time, not by consumers and business but by government spending.
Agricultural Mining Construction Manufacturing Durable Goods
TWU Wholesale Trade Retail Trade Information FIRE B & P E & H H & L Other Services Government 857,723.5 675,974.3 2,865.7 781.6 27,185.0 92,563.1 39,595.5 52,967.5 27,536.3 33,039.9 39,170.3 33,355.9 127,787.1 98,724.3 54,865.7 22,538.0 12,338.2 75,796.5 2024* Percent Change 6.6 3.0 -11.0 7.8 5.1 4.8 3.7 5.6 3.7 0.4 6.1 5.9 1.9 3.4 2.6 1.1 0.8 1.5 * Millions of dollars 8 6 2 0 4 Quarterly Forecasted Growth Rates In Real GDP 2.5 2024 If 2024 IIf 2024 IIIf 2024 IVf 3.1 2.6 2.1
Nondurable Goods
2024 GDP S ECTOR A NALYSIS
The chart to the left presents the projected contributions of each major economic sector to North Carolina’s Gross Domestic Product (GDP). The real (inflation-adjusted) growth rate for 2024 is projected to increase 3.0 percent. Real growth rates for each sector (displayed in black type) are plotted on the horizontal axis. Percentages of GDP contributed by each sector (displayed in green type) are plotted on the vertical axis. The resulting rectangles show the weighted importance of each sector’s growth during 2024. All of the sector information presented in the table to the left is based on the North American Industry Classification System (NAICS) definitions.
Fourteen of the state’s economic sectors are expected to experience output increases during 2024. The sectors with the strongest growth rates are mining with a real increase of 7.8 percent; retail trade with a real increase of 6.1 percent; information with a real increase of 5.9 percent; nondurable goods manufacturing with a real increase of 5.6 percent; construction with a real increase of 5.1 percent; transportation, warehousing, and utilities (TWU) with a real increase of 3.7 percent; durable goods manufacturing with a real increase of 3.7 percent; and business and professional services with a real increase of 3.4 percent.
Six other sectors are expected to experience growth rates, at levels equal to or below the overall 3.0 percent GDP real growth rate. These sectors are educational and health services with a real increase of 2.6 percent; finance, insurance, and real estate (FIRE) with a real increase of 1.9 percent; government with a real increase of 1.5 percent; hospitality and leisure services with a real increase of 1.1 percent; other services with a real increase of 0.8 percent; and wholesale trade with a real increase of 0.4 percent.
Only the agriculture sector is expected to experience a decline in 2024.
Percent of Total Real GDP Percent of Real Sector Growth 0.4 2024 Total Real GDP Growth 3.0% 0.1 4.2 6.1 8.2 4.2 5.1 6.0 3.5 11.7 19.7 15.2 8.5 1.9 5.1 B&P Services 3.4 E&H Services 2.6 H&L Services 1.1 Other Services 0.8 Government 1.5 FIRE 1.9 Information 5.9 Durables 3.7 TWU 3.7 Wholesale Trade 0.4 Retail Trade 6.1 Nondurables 5.6 Construction 5.1 Mining 7.8 Agriculture -11.0
2023 E MPLOYMENT S ECTOR A NALYSIS
The sector employment analysis presented on this page is based on the North American Industrial Classification System (NAICS). North Carolina employment reached 4,965,600 persons by December 2023, a 1.8 percent increase over the December 2022 employment level. The state added 85,800 net jobs in 2023.
Ten of the state’s fourteen nonagricultural sectors of the economy experienced employment increases during 2023. The sectors with the strongest employment increases in 2023 were hospitality and leisure at 4.6 percent, and educational and health services at 3.8 percent.
2023 Employment Highlights
Construction 3.6 Percent of Sector Employment Growth Nondurables -1.9 FIRE 2.7 Retail Trade 0.3 Durables -0.6 Wholesale Trade 3.0 0.1 5.3 5.0 4.3 4.4 10.5 4.0 10.8 15.1 Government 2.7 6.2 Other Services 1.4 Information -2.6 B&P Services 0.1 E&H Services 3.8 H&L Services 4.6 15.0 13.7 4.0 1.7 Mining 1.8
2023 Year-End Employment Trends Percent of Total Employment TWU -1.5
Total Establishment Employment Mining Construction Manufacturing Durable Goods Nondurable Goods Wholesale Trade Retail Trade TWU Information FIRE B&P Services E&H Services H&L Services Other Services Government 4965.6 5.7 261.8 467.3 217.9 249.4 211.6 521.5 197.9 83.5 310.2 742.4 678.4 536.9 197.3 751.2 Year-End* Percent Change 1.8 1.8 3.6 -1.3 -0.6 -1.9 3.0 0.3 -1.5 -2.6 2.7 0.1 3.8 4.6 1.4 2.7 *dThousands of persons
2024 E MPLOYMENT
The sector employment analysis presented on this page is based on the North American Industrial Classification System (NAICS). North Carolina employment is expected to reach 5,026,000 persons by December 2024, a 1.2 percent increase over the December 2023 employment level. The state is expected to add 60,400 net jobs in 2024.
All fourteen of the state’s nonagricultural sectors of the economy are expected to experience employment increases during 2024. The sectors with the strongest projected employment increases in 2024 are information at 4.1 percent and other services at 3.1 percent.
2024 Employment Highlights
*Thousands of persons
Construction 1.8 Percent of Sector Employment Growth Nondurables 0.7 FIRE 0.9 Retail Trade 0.2 Durables 1.1 Wholesale Trade 2.7 0.1 5.3 5.0 4.3 4.4 10.4 4.0 10.7 15.0 Government 0.5 6.2 Other Services 3.1 Information 4.1 B&P Services 2.1 E&H Services 1.3 H&L Services 0.6 15.1 13.7 4.0 1.7 Mining 0.0
S ECTOR
NALYSIS 2024 Year-End Employment Trends Percent of Total Employment TWU 0.8
A
Total Establishment Employment Mining Construction Manufacturing Durable Goods Nondurable Goods Wholesale Trade Retail Trade TWU Information FIRE B&P Services E&H Services H&L Services Other Services Government 5026.0 5.7 266.4 471.5 220.3 251.2 217.4 522.8 199.4 86.9 312.9 757.8 687.0 539.9 203.5 754.8 Year-End* Percent Change 1.2 0.0 1.8 0.9 1.1 0.7 2.7 0.2 0.8 4.1 0.9 2.1 1.3 0.6 3.1 0.5
2023 -2024 NORTH CAROLINA UNEMPLOYMENT RATE
U.S. Seasonally Adjusted
NC Seasonally Adjusted Forecast
NC Seasonally Adjusted
FORECAST reports historical seasonally adjusted monthly unemployment rates for North Carolina and the United States and forecasts the seasonally adjusted monthly unemployment rate for North Carolina. The seasonal adjustment accounts for variations in labor market conditions that cause regular fluctuations in the unemployment level each month.
The graph at the top of this page provides a summary of the monthly unemployment rates for 2023 and 2024. The solid blue line represents the United States seasonally adjusted historic unemployment rate. The seasonally adjusted unemployment rate for North Carolina is represented by the solid green line. The North Carolina seasonally adjusted unemployment rate forecast is represented by the solid red line. The seasonally adjusted rates for the United States and North Carolina can be compared directly and provide more reliable estimates than the unadjusted rates.
The United States and North Carolina started 2023 with unemployment rates of 3.4 percent and 3.8 percent respectively. The U.S. unemployment rate has been around 3.5 percent through the first half of 2023 but increased slightly since the middle of the year and is currently at 3.8 percent. The North Carolina rate fell during the middle of 2023 but has risen back up to 3.5 percent by March of 2024. The North Carolina rate will continue to increase slightly over the next year to 4.0 percent by December 2024.
3 3.2 3.4 3.6 3.8 4 4.2 4.4 4.6 4.8 5 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2025 O UTLOOK
Gross State Product (GSP) is expected to reach a level of $865,377.6 million in 2025. Real (inflation adjusted) GSP is expected to increase by 2.3 percent over the 2024 level. This growth in 2025 would follow 3.0 percent growth in 2024 and result in a fifth year of economic growth for the North Carolina economy since the pandemic recession in 2020. The North Carolina economy is expected to add 53,400 jobs in 2025, maintaining the unemployment rate of around 4.0 percent through December 2025.
2025 GDP Highlights
Current Dollars
Total Gross Product
Constant (2012 Dollars)
Total Gross Product
Agricultural Mining
Mining
Construction
2025 Employment Highlights
Total Establishment
2025 IIf 2025 If 2025 IVf 4 3 2025 IIIf 1 0 2 2025 Quarterly Forecasted Growth Rates In Real GSP 2.1 2.6 2.5 2.5
Manufacturing
TWU Wholesale Trade Retail Trade Information FIRE B & P E & H H & L Other Services Government 865,377.6 659,270.7 2,944.5 809.8 27,999.7 94,628.5 40,535.7 54,092.8 28,224.4 33,762.5 40,002.5 35,190.1 130,023.0 101,376.1 55,997.2 23,101.2 12,530.7 77,122.7 2025 * Percent Change 5.9 2.3 2.7 3.6 3.0 2.2 2.4 2.1 2.5 2.2 2.1 5.5 1.7 2.7 2.1 2.5 1.6 1.7 * Millions of dollars
Durable Goods Nondurable Goods
Employment Mining Construction Manufacturing Durable Goods Nondurable Goods Wholesale Trade Retail Trade TWU Information FIRE B&P Services E&H Services H&L Services Other Services Government 5,079.4 5.7 268.8 475.7 223.3 252.4 223.4 524.6 201.8 91.7 315.3 769.8 693.0 545.9 205.9 757.8 Year-End* Percent Change 1.1 0.0 0.9 0.9 1.4 0.5 2.8 0.3 1.2 5.5 0.8 1.6 0.9 1.1 1.2 0.4 *
Thousands of persons