NC unemployment rate steadily going the wrong way
Published August 22, 2015
by Doug Clark, Off the Record, Greensboro News-Record, August 21, 2015
North Carolina's unemployment rate increased for the fifth month in a row in July, to 5.9 percent, the Commerce Department reported today.
Having fallen below the national average early this year, it now stands 0.6 percentage points higher.
There's a significant difference between the household and establishment surveys, the two means of measuring employment. The former reports the number of employed persons dropped in North Carolina; the latter reports the number of jobs increased.
Economists tell us these numbers bounce up and down from month to month.
Yet, the rise of our unemployment rate is steady.
As it fell from a recession high of more than 11 percent all the way down to 5.3 percent, politicians claimed credit, particularly for cutting corporate and personal income tax rates. Maybe they were right, maybe not. But the unemployment rate has taken an unwelcome turn now.
Why? Last week, the Commerce Department's Labor and Economic Analysis division took a stab at an explanation.
I recommend the article, which expands on these points:
• The recent increase in North Carolina’s unemployment rate is based on preliminary data that are subject to substantial revision. We should have a better sense of whether this increase truly reflects facts on the ground after the data are revised in 2016.
• New claims for unemployment insurance have not spiked, indicating that we are not entering recession territory.
• Oft-repeated claims that unemployed entrants to the labor force are inflating the unemployment rate are not supported by existing evidence.
• If we are truly seeing an increase in North Carolina’s unemployment rate, current evidence suggests that it may be driven by the labor market’s inability to match unemployed workers to the ample amount of jobs available in our state.
I'd quibble with whether there really is an "ample amount of jobs available in our state." One indicator is wages. If employers are competing for workers, they should be offering better pay. But wages aren't rising much, if at all. Today's report shows weekly earnings for manufacturing production workers declined in July.
What are businesses doing with these tax cuts, if they're not hiring more workers and raising wages?
North Carolina is now tied for 37th in the nation in its unemployment rate, ahead of Alabama, Alaska, Arizona, California, Washington, D.C., Georgia, Louisiana, Mississippi, Nevada, New Mexico, South Carolina and West Virginia.
Nebraska has the lowest unemployment rate at 2.7 percent.
August 22, 2015 at 4:17 pm
Richard L Bunce says:
"Since July 2014, Total Nonfarm jobs gained 110,200 with the Total Private sector growing by 112,600 and Government
decreasing by 2,400."
Sounds good... don't look at the unemployment rate change month to month... to many seasonal adjustments that may not be valid.
Staying in business, staying in NC. Your theory is if they are not hiring people and paying their employees more then the next best use of that business capital is to have government confiscate it? Business does not exist to employ people or provide them with a livable income. Business exists to provide products and services to customers seeking them. There are many viable businesses that provide products and services without any employees. Perhaps Mr. Clark even has one or more of those businesses. Perhaps government should confiscate all the capital in his business as by his inference he is doing nothing with it.
August 23, 2015 at 1:29 pm
bruce stanley says:
Richard,
These guys writing negatively about the GOP tax cuts don't have a clue what is takes to run a business. Bruce
August 22, 2015 at 4:25 pm
bruce stanley says:
Doug Clark asks: What are businesses doing with these tax cuts, if they're not hiring more workers and raising wages?
Well, maybe they are buying capital equipment, or maybe they are shoring up their balance sheets by reducing debt they had to borrow in order to pay the previous onerous 7.75% tax on successful S Corporation owners.
What business is it of a newspaper editor regarding what a business does with it's earnings?
August 23, 2015 at 4:50 pm
Richard L Bunce says:
I suspect he thinks it's the governments money until the government says it is not.
August 22, 2015 at 9:45 pm
bruce stanley says:
Doug Clark, I am hearing from other sources that NC private sector employment is in fact increasing and NC public sector employment is decreasing if you break it down. Can you enlighten us? If true, in my view, that is healthy for the NC economy as public sector employees are not contibuting to the NC GDP. It takes 6 private sector jobs to fund a public sector job.
August 23, 2015 at 9:51 pm
bruce stanley says:
Well, maybe they are buying capital equipment, or maybe they are increasing inventory. Maybe they are using it to finance growing receivables, or shoring up their balance sheets by reducing debt. Maybe they are a successful, growing small business organized as an S Corporation and with the tax cut are paying off debt the owners were required to borrow in order to pay the previous onerous NC 7.75% tax in addition to the Federal 39.6%.
