Slumping employment numbers and widespread concerns about the cost of living are clouding the economic outlook going into the fourth quarter, according to a Clemson economics professor’s discussion on the economy for Ten at the Top Aug. 13.
As the third quarter of 2026 draws to a close, about the best that can be said of the U.S. economy is that it is “OK” but with some troubling indicators that state may be fragile, according to Scott Baier, associate dean of research for Clemson University’s Wilbur O. and Ann Powers College of Business.
Sluggish growth
Real GDP growth in the U.S. has been sluggish so far this year with the second quarter growth rate at 1.5%, which is down from 2.1% during the first quarter, Baier said. This is compared to about a 3% average annual growth rate for the country’s real GDP over the past 10 to 20 years.
Weakening jobs numbers and persistent inflation in recent months have complicated the picture for the Federal Reserve Board as it contemplates adjustments to interest rates, Baier said.
“The Fed is stuck right now between a rock and a hard place because of the slower growth and higher inflation,” he said. “AI could actually really help.”
Baier said the vast spending on AI and AI infrastructure has accounted for much of the country’s GDP growth recently, but the growing public pushback against building data centers introduces some uncertainty as to whether that level of investment will continue.
Overall consumer spending, which accounts for about 60% of GDP, remains relatively strong, but the top-line number tells only part of the story, Baier said. A deeper dive into the numbers shows that much recent consumer spending is being driven by high-income consumers. Coupled with rising levels of credit card and other types of revolving debt, this is another worrying sign of potential weakness in the economy.
“What it looks like is that high income consumers are helping to carry the economy while lower income consumers seem to be a little bit more stressed,” Baier said.
Other indicators of a fragile economy include:
- Tariff uncertainty continues to be a drag on corporate capital investment.
- The war with Iran is keeping energy and fuel prices elevated.
- Housing affordability remains a nationwide dilemma.
- A significant slump in blue collar jobs points to weakness in America’s manufacturing sector.
The local picture
Baier said the tremendous in-migration to South Carolina in recent years has had a major impact on housing costs. For instance, the state has fallen out of the top 10 states for housing affordability with Redfin ranking it 26th in its 2025 roundup.
For context, between July 2024 and July 2025, South Carolina’s population grew faster than any other state in the nation with a population gain of nearly 67,000 in that 12-month period.
South Carolina home prices have risen 60% above their pre-COVID levels with the state’s median home price at $398,000 in March of this year. In Greenville, the median sale price is now about $525,000.
On the employment front, payroll jobs growth slumped to 0.8% as of June this year, down from 2% a year earlier. Despite that, South Carolina’s unemployment rate fell to 4.4% in June with Greenville County unemployment sitting at 3.7%. Overall, a record 2.6 million South Carolinians were employed as of June.
S.C. economy by the numbers
Here are some key numbers reflecting the state of South Carolina’s economy:
- Median home price overall for the state has risen to $398,000
- Median sale price for homes in Greenville is now about $525,000
- Statewide job growth has slowed to 0.8%
- Statewide unemployment rate in June was 4.4%
Source: Wilbur O. and Ann Powers College of Business/Clemson University
