Hi jonah_firchilt,
The right way is to set BB_NUMBER_THREADS and PARALLEL_MAKE as you wrote.
I had just checked and it worked for me. Just add this lines to your file [your_yocto_build_dir]/conf/local.conf
BB_NUMBER_THREADS = "2"
PARALLEL_MAKE = "-j 2"
And change the number 2 for the number that fits to your system. Remember, lower number slow down the Yocto building. Higher number increase Yocto build but can starve all other process in your machine.
After change local.conf, move to Yocto base dir and run command source setup-environment ./your_build_folder
Thanks a lot.
Regards,
Renato Kiss