Weak or Strong? NCCI’s Cooper Investigates Economic Trends at AIS

Conference Insights

With concerns about inflation and surging gas prices dominating headlines about the economy, one might think the current situation is like the 1970s, when fuel shortages were the norm.

But at NCCI's Annual Insights Symposium, Practice Leader and Senior Economist Stephen Cooper said he's feeling '22.

Current Situation

"2025 saw the slowest employment growth outside a recession in decades," Cooper said. "Hiring, a direct measure of the economy, feel back to levels we saw in 2015, which was lower than what it was just before the pandemic."

So while in the five years before the pandemic, the economy added an average of 190,000 jobs per month, in 2025, the number dropped to 10,000 per month.

Things have started to a look better in 2026, with average monthly hirings checking in at about 75,000 so far this year, but "curveballs" in the form of the Iran conflict and rising energy costs could change economic dynamics.

One industry that has been especially strong this year has been construction, Cooper said.

"Trend in construction has been interesting," Cooper said. "We've seen a nice rebound in 2026."

But the industry that continues to pull the economy ahead remains healthcare.

"There's been a 4% growth in healthcare, which has offset declines in all other sectors," Cooper said.

Who's Working?

While it's not inaccurate to say that the workforce is aging, it's probably better to note that most of the workforce is in middle age, as Generation X and Millennials grow older. But while this is happening, Gen Z and Baby Boomers are at lower-represented in the workforce.

For those working, is it a strong labor market or is it weak?

"Unemployment remains at right about 4.4%, and trending wage growth has been sustained, indicating that the labor market remains tight," Cooper said.

Additionally, the number of average weekly ours have softened.

"Prior to the pandemic, the average weekly hours was 34.5; after the pandemic, the number has been 34.25," Cooper said. "While 15 minutes might not seem like much, that amounts to $80 billion that employers haven't paid out."

Another indicator is that tells is a story is that prior to 2025, job switchers saw higher wage increases than those who stayed put, but that trend came to a halt last year.

"Employers are still paying up to keep their staff," Cooper said. "That's a sign that tells me the labor market is still tight."

What's up with Inflation?

The jump in prices -- especially gas prices -- shows that energy is behind the latest increase in inflation, something that's "distinct from the pandemic-driven price increases," Cooper said.

Just as Russia's invasion of Ukraine sent energy prices soaring in 2022, with ripple effects across the economy, the conflict in Iran has done much of the same so far this year. On top of that, political winds are still blowing that could nudge inflation higher.

"Tariffs aren't going to go away," Cooper said. "But a slowdown in house prices has offset the impact of tariffs."

What's coming over the horizon -- and whether it might be a recession -- could depend on several factors, including some that aren't certain.

In no-recession category, Cooper pointed to productivity, the labor rebound, and larger tax returns. On the other hand, there's still uncertainty, stagflation, and the ever-present risk of unforeseen shock.

"What typically causes recessions is the unknown," Cooper said.

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