NC unemployment down but recovery stalling out

by John Quinterno, South by North Strategies, October 2, 2013

Between August 2012 and August 2013, unemployment rates fell in all 100 of North Carolina’s counties and in all 14 of the state’s metropolitan areas. Over that same period, the size of the labor force decreased in 78 counties and in 12 metro areas. These findings come from new estimates released by the Labor and Economic Analysis Division of the North Carolina Department of Commerce.

“Local unemployment rates have trended downward over the course of 2013,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Unemployment rates nevertheless remain elevated, with 22 counties and one metro area posting unemployment rates of at least 10 percent. In August 2008, in contrast, seven counties and no metro areas had unemployment rates of at least 10 percent.”

Compared to December 2007, which is when the national economy fell into recession, North Carolina now has 2.8 percent fewer jobs (-115,700). In August, the state lost 1,700 more jobs than it gained (+/-0 percent). Since bottoming out in February 2010, the state’s labor market has netted some 5,050 jobs per month, resulting in a cumulative gain of 212,100 positions (+5.5 percent).

Between July 2013 and August 2013, local unemployment rates decreased in 98 of the state’s 100 counties, rose in one county, and held steady in one county. Individual county rates ranged from 4.1 percent in Currituck County to 15.2 percent in Scotland County. Overall, 22 counties posted unemployment rates greater than or equal to 10 percent, and 66 counties posted rates between 7 and 9.9 percent.

“Non-metropolitan labor markets consistently have struggled relative to metropolitan ones,” noted Quinterno. “In August, 9.2 percent of the non-metro labor force was unemployed, compared to 7.9 percent of the metro labor force. Compared to December 2007, the non-metro labor force now has 5.4 percent fewer employed persons, while the number of unemployed individuals is 63.1 percent larger.”

Over the month, unemployment rates fell in all 14 of the state’s metro areas. Rocky Mount had the highest unemployment rate (12 percent), followed by Fayetteville (9.8 percent) and Hickory-Morganton-Lenoir (9.1 percent). Asheville had the lowest unemployment rate (6.3 percent), followed by Durham-Chapel Hill (6.5 percent) and Raleigh-Cary (6.8 percent).

Compared to August 2012, unemployment rates in August 2013 were lower in all 100 counties and all 14 metro areas. Over the year, however, labor force sizes decreased in 78 counties and in 12 metros. In fact, the statewide labor force was 0.6 percent smaller (-28,882 individuals) in August 2013 than it was in August 2012. Among metros, Rocky Mount’s labor force contracted at the greatest rate (-3 percent), followed by Hickory-Morganton-Lenoir (-1.8 percent) and Fayetteville (-1.4 percent). With those changes, metro areas now are home to 71.8 percent of the state’s labor force, with 50.5 percent of the labor force residing in the Triangle, Triad, and Charlotte metros.

In the long-term, improvements in overall labor market conditions depend on growth in the Charlotte, Research Triangle, and Piedmont Triad regions. Yet growth in these metros remains muted. Collectively, employment in those three metro regions has risen by 3.3 percent since December 2007, and the combined August unemployment rate in the three regions equaled 7.7 percent. That was down from the 9 percent rate recorded one year ago yet was well above the 6.3 percent rate recorded in August 2008. Of the three broad regions, the Research Triangle had the lowest August unemployment rate (6.8 percent), followed by the Piedmont Triad (8.3 percent) and Charlotte (8.4 percent).

The local employment report for August also provides insights into the effects of the extensive changes to the state’s system of unemployment insurance implemented over the summer. Last month, the number of regular unemployment insurance initial claims filed in North Carolina totaled 28,443, down from the 51,446 initial claims filed a year earlier (-44.7 percent). Mecklenburg County was home to greatest number of regular initial claims (3,155), followed by Wake (2,020), Guilford (1,570), Cumberland (1,287), and Forsyth (914) counties.

Between September 2012 and August 2013, North Carolinians received a (nominal) total of $2.3 billion in unemployment insurance compensation, down from the (nominal) $3.1 billion received between September 2011 and August 2012.

“Despite the passage of 3.5 years since the onset of a labor market recovery in North Carolina, local unemployment rates remain elevated throughout much of the state,” said Quinterno. “Recent declines in local unemployment rates actually are masking a number of alarming developments—developments that signal a labor market that is under-performing. The modest recovery that North Carolina has experienced in recent years appears to be stalling out in 2013.”