Key indicators foretell better days for economy

Editorial by Winston-Salem Journal, December 8, 2013

Two recent developments on the economic front bode well for the Triad and North Carolina going into 2014: The state’s unemployment rate continues to drop and is at its lowest point since the 2008 downturn, and both Forsyth and Guilford counties are again among the state’s top 20 counties based on economic health.

This is a package of good news indeed. We hope it signals an end to the long winter of low growth and high unemployment that began more than five years ago.

The most significant news is that North Carolina’s 8.0 percent unemployment rate for October – following a .07 percentage-point drop over two months – is no longer the highest in the Southeast and is closing in on the national rate of 7.3 percent, the Journal’s Richard Craver reported.

“The bottom line is that North Carolina is now growing faster than the nation for the first time since the recession ended back in 2009,” Mark Vitner, a senior economist with Wells Fargo Securities, told the Journal last month.

The state added 22,200 jobs during September and October, according to data from the U.S. Department of Labor, the third highest gain in the nation. The increase year over year of 80,100 jobs was sixth highest.

Meanwhile, the N.C. Commerce Department reported this week that Guilford County has rejoined Forsyth County among the counties ranked as having the best economic health for 2014, Craver reported. The so-called Tier 3 counties – the top 20 out of all 100 counties – are ranked based on a combination of each county’s unemployment rate, median household income, population growth and assessed property valuation per capita. Guilford had fallen into Tier 2 because of slow population growth during 2012. Watauga County was the only other Tier 3 county in Northwest North Carolina.

The rankings help determine eligibility for state grant programs and economic incentives. Those counties in the region in Tier 1 (Alleghany and Surry) and Tier 2 (Ashe, Davidson, Davie, Yadkin and Stokes) are provided more economic development assistance such as larger tax credits to employers who add workers.

On the unemployment question, some economists question the rapid drop as having been fueled more by people dropping out of the job market than by new jobs being created.

That may be true, but the momentum of recovery is growing and companies that have been reporting strong earnings but sitting on cash need now to respond by creating new jobs. When more North Carolinians are working, the demand for products and services will grow as well.