Mike Walden responds to NC SPIN

On last week's NC SPIN we reported that NC State Economist Mike Walden predicted that North Carolina's unemployment rate would drop from its current 8.8 percent (now 8.9) to 6.8 percent by 2015. Host Tom Campbell asked the question, "What does Mike Walden know that we don't?"

Walden responds to that question:

"You asked on your recent program what I saw in the NC job numbers that others don't. Here's my analysis. Since the bottom of the jobs recession (early 2010), NC payroll jobs are up 213,000, a 5.6% gain. This is actually greater than the 5.2% gain in payroll jobs at the national level over the same time period. Incidently, I use payroll jobs due to the larger sample size of calculating them (10x larger sample than the survey which derives the unemployment rate - for example, yesterday's report for NC showed a gain of 8200 payroll jobs. Of the two job surveys, economists typically use the payroll survey counts).

"NC's unemployment rate is still higher than the national rate for two reasons. First - the recession was deeper here - as recessions typically are (see my book "North Carolina in the Connected Age") due to our larger manufacturing base. Second - people still moved to NC during the recession - and those who did not get jobs added to the jobless rate. The result - NC has more of a "boom/bust" economy - doing better in the "up" years and worse in the "down" years. During the job growth years of 2003-2008, payroll employment growth was almost twice as fast in NC as in the nation.

"The big economic problem in NC is the continuing (and widening) urban-rural divide (see my N&O Point of View, July 12, 2013). Charlotte and the Triangle are already back to pre-recessionary job levels, with payroll job growth rates 50% to 100% greater than the nation. Asheville and Wilmington are coming back - the Triad is gaining more slowly.

"But the big problems are in our rural and small-town areas, which have not yet transitioned from the "old economy" to the "new". They ares still trying to find where they fit into our tech-heavy, globalized economy.

"Looking ahead, I see growth in NC coming from household in-migration - especially retirees bringing their pensions, companies moving here to hire our growing number of college grads in the metro areas, and construction needed to keep up with household formation."