50,000 could lose jobs in a 2023 recession

Published January 5, 2023

By Michael Walden

Fifty thousand workers in North Carolina “could lose their jobs” in a coming recession later this year, N.C. State economist Dr. Mike Walden warned Wednesday. And the rapidly growing Triangle won’t escape without harm, he stressed.

To put that number in perspective, that total is one fourth the current number of unemployed, according to federal data. It also would be nearly double the number of new jobs the state has secured for the future as part of a record-breaking year in 2022 for industrial recruitment.

“Even the fast-growing Triangle will feel the effects of the recession, and will see some layoffs and higher unemployment,” Walden explaine

His analysis moves well beyond general terms into almost shock therapy for people who have endured inflation, worried about jobs and layoffs but now see in his numbers the reality of what could strike.

Speaking at Cary Chamber of Commerce event, Walden forecast a recession will hit before the end of the year. The state economy has shown warning signs of a recession for months, according to the index of economic indicators he compiles for NCSU.

Walden did offer a caveat on the recession and job losses, saying each could be worse. And he said that inflation will cool by several percentage points – but not before the Federal Reserve raises interest rates into 2023, adding an increasing cost on the economy across the U.S.

“The inflation rate will moderate in 2023, possibly ending the year at near 4% (year over year),” Walden said. That’s lower than record highs posted throughout 2022.

“However, the Fed will continue raising interest rates – possibly raising them by an additional 2 percentage points,” the economist added.

That means a further decline in economic output, in other words a recession, which many economists and financial institutions have predicted.

“This [Fed action] will result in a mild recession at the end of 2023,” Walden warned.

And that could mean a big jump in the state’s jobless ranks.

“The unemployment rate in the state could jump to 5% or 6%, which is very modest for a recession,” he noted.

The N.C. unemployment for November was 3.9%. December figures have yet to be released.

“Still,” Walden said, “50,000 North Carolinians could lose their jobs.”

Walden wasn’t only offering doom and gloom, however.

“[T]he economy will recover rapidly and be back to economic growth in early 2024,” he said.

He also sees long-term benefits for the Triangle and North Carolina from what he calls a “New Energy Corridor.”

“A game-changer for the Triangle, and especially for western Wake County – including Cary – will be the development of a ‘New Energy Corridor’ between the Triangle and Triad, based around the auto manufacturer Vinfast, the chip producer Wolfspeed, and Toyota’s battery factory near Greensboro,” Walden said.

“There will be strong positive economic spillover impacts on Cary and western Wake County as the New Energy Corridor emerges.”