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December/January 2023

Stepping up to the checkout counter might hurt more this holiday season. For a state where the economy is churning with low taxes and steady growth, North Carolinians have struggled under the weight of inflation in 2023.

Headlines are brimming with news of economic growth in North Carolina, although it remains below the national level of 3%. So why do nearly half of us in the Tar Heel State say we are worse off financially than one year ago?

It’s not because of “misinformation” or partisan messaging. It is simply because prices are ballooning faster than paychecks. According to a study from the American Enterprise Institute, average real wages are down 3% from 2020. Even worse, average wages artificially spiked during the pandemic because lower-paid workers lost their jobs. Now, we have a society that remembers a pre-pandemic economy with growing wages and low interest rates and prices. They will not forget that in 2024.

As election season heats up, nothing gets closer to a “kitchen table issue” than inflation, and few policy priorities or political messages can distract voters from it.

For millions of North Carolina families, it all comes down to the cost of groceries. Over the last 12 months, the CPI inflation rate in North Carolina was 7.7%. The average price of gas was $3.39 per gallon this year, and milk was $4.22 per gallon. While inflation’s heated trajectory cooled a bit to 3.5% this fall, it is still well over the 2% target rate set by the Federal Reserve. Since President Joe Biden took office, the CPI has risen 17%.

More than 80% of North Carolinians say inflation has affected some or most of their spending decisions. Half of us expect inflation to get worse, and it could, particularly if our labor participation rate continues to stall. Over 2023, the number of North Carolinians working fell to 60%, more than two percentage points lower than the national average. Small businesses trying to capitalize on the 2023 holidays can’t hire enough help to make ends meet.

As holiday baking traditions fill North Carolina homes this month, flour prices are up 34%, poultry up 25%, and dairy products up 24% since 2020. Due to rising interest rates over the last four years, the mortgage on that median-priced home has doubled.

Inflation is a hidden tax that drives up costs and interest rates for everyone and disproportionately harms the poorest among us.

Listen closely to campaign ads and stump speeches this year. Candidates will attempt to deflect from the impact of inflation or claim it is out of policymakers’ control. Don’t be fooled. It is not.

The inflation we see today is the predictable and direct result of the pandemic spending spree by the federal government, followed by economic policy mismanagement that led to labor shortages and supply chain disruptions. We should be debating these issues on the campaign trails this year. How will congressional candidates get back to responsible governance? Their focus on the myriad of other messages that are clogging our news feeds will not convince voters whose household incomes are dwindling under the current policy priorities.

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December/January 2023 - Carolina Journal
Print Edition

December/January 2023

Stepping up to the checkout counter might hurt more this holiday season. For a state where the economy is churning with low taxes and steady growth, North Carolinians have struggled under the weight of inflation in 2023.

Headlines are brimming with news of economic growth in North Carolina, although it remains below the national level of 3%. So why do nearly half of us in the Tar Heel State say we are worse off financially than one year ago?

It’s not because of “misinformation” or partisan messaging. It is simply because prices are ballooning faster than paychecks. According to a study from the American Enterprise Institute, average real wages are down 3% from 2020. Even worse, average wages artificially spiked during the pandemic because lower-paid workers lost their jobs. Now, we have a society that remembers a pre-pandemic economy with growing wages and low interest rates and prices. They will not forget that in 2024.

As election season heats up, nothing gets closer to a “kitchen table issue” than inflation, and few policy priorities or political messages can distract voters from it.

For millions of North Carolina families, it all comes down to the cost of groceries. Over the last 12 months, the CPI inflation rate in North Carolina was 7.7%. The average price of gas was $3.39 per gallon this year, and milk was $4.22 per gallon. While inflation’s heated trajectory cooled a bit to 3.5% this fall, it is still well over the 2% target rate set by the Federal Reserve. Since President Joe Biden took office, the CPI has risen 17%.

More than 80% of North Carolinians say inflation has affected some or most of their spending decisions. Half of us expect inflation to get worse, and it could, particularly if our labor participation rate continues to stall. Over 2023, the number of North Carolinians working fell to 60%, more than two percentage points lower than the national average. Small businesses trying to capitalize on the 2023 holidays can’t hire enough help to make ends meet.

As holiday baking traditions fill North Carolina homes this month, flour prices are up 34%, poultry up 25%, and dairy products up 24% since 2020. Due to rising interest rates over the last four years, the mortgage on that median-priced home has doubled.

Inflation is a hidden tax that drives up costs and interest rates for everyone and disproportionately harms the poorest among us.

Listen closely to campaign ads and stump speeches this year. Candidates will attempt to deflect from the impact of inflation or claim it is out of policymakers’ control. Don’t be fooled. It is not.

The inflation we see today is the predictable and direct result of the pandemic spending spree by the federal government, followed by economic policy mismanagement that led to labor shortages and supply chain disruptions. We should be debating these issues on the campaign trails this year. How will congressional candidates get back to responsible governance? Their focus on the myriad of other messages that are clogging our news feeds will not convince voters whose household incomes are dwindling under the current policy priorities.

Latest Issues