01.07.2014 News Releases, Policy Points

Weak Local Employment Conditions Endure

CHAPEL HILL, NC (January 7, 2014) – Between November 2012 and November 2013, unemployment rates fell in all 100 of North Carolina’s counties and in all 14 of the state’s metropolitan areas. Yet over the same period, the size of the labor force decreased in 92 counties and in 13 metro areas.

These findings come from new estimates released by the Labor and Economic Analysis Division of the North Carolina Department of Commerce.

“Unemployment rates across much of North Carolina have trended downward over the past year, with the statewide rate falling by 2.2 percentage points,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy.

“Many communities now are seeing some of the lowest unemployment rates recorded since the onset of the ‘Great Recession’ in late 2007,” added Quinterno. “Local unemployment rates nevertheless remain elevated, with 99 counties and 14 metro areas posting unemployment rates greater than those logged at the end of 2007.”

Compared to December 2007, which is when the national economy fell into recession, North Carolina now has 2 percent fewer payroll jobs (-83,900). In November, the state lost 6,500 more jobs than it gained (-0.2 percent). Since bottoming out in February 2010, the state’s labor market has netted some 5,420 jobs per month, resulting in a cumulative gain of 243,900 positions (+6.4 percent).

Between October 2013 and November 2013, local unemployment rates decreased in 91 of the state’s 100 counties and rose in 9 counties. Individual county rates in November ranged from 4.3 percent in Orange County to 13.5 percent in Scotland County. Overall, 6 counties posted unemployment rates greater than or equal to 10 percent, and 57 counties posted rates between 7 and 9.9 percent.

“Non-metropolitan labor markets still are struggling relative to metropolitan ones,” noted Quinterno. “In November, 7.8 percent of the non-metro labor force was unemployed, compared to 6.6 percent of the metro labor force. Compared to December 2007, the non-metro labor force now has 5 percent fewer employed persons, while the number of unemployed individuals is 37.2 percent larger.”

Between October and November, unemployment rates fell in all 14 of the state’s metro areas. Rocky Mount had the highest November unemployment rate (10 percent), followed by Fayetteville (8.1 percent) and Hickory-Morganton-Lenoir (7.6 percent). Durham-Chapel Hill had the lowest unemployment rate (5.1 percent), followed by Asheville (5.2 percent) and Raleigh-Cary (5.4 percent).

Compared to November 2012, unemployment rates in November 2013 were lower in all 100 counties and all 14 metro areas. Over the year, however, labor force sizes decreased in 92 counties and in 13 metros. In fact, the statewide labor force was 1.9 percent smaller (-88,254 individuals) in November 2013 than it was in November 2012.

Among metros, Rocky Mount’s labor force contracted at the greatest rate (-5 percent), followed by Hickory-Morganton-Lenoir (-3.1 percent) and Burlington and Jacksonville (both -2.4 percent). With those changes, metro areas now are home to 72 percent of the state’s labor force, with 50.8 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 the three metro regions has risen by 5.1 percent since December 2007, and the combined unemployment rate in November totaled 6.3 percent. Of the three broad regions, the Research Triangle had the lowest November unemployment rate (5.5 percent), followed by the Piedmont Triad (6.9 percent) and Charlotte (7 percent).

The local employment report for November 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 26,273, down from the 60,805 initial claims filed a year earlier (-56.8 percent).

Mecklenburg County was home to greatest number of regular initial claims (2,551), followed by Wake (2,095), Guilford (1,253), Cumberland (840), and Forsyth (761) counties.

In November 2013, North Carolinians received a (nominal) total of $55.7 million in regular state-funded and federal unemployment insurance compensation, down from the (nominal) $200.7 million received in November 2012. This sharp decline (-72.2 percent) is attributable to a mix of factors, such as drops in the number of insurance claims resulting from economic improvements and legal changes to eligibility criteria.

Additionally, the state’s decision to exit the federal Emergency Unemployment Compensation (EUC) program reduced the amount of federal unemployment insurance compensation flowing into the state in November. Between November 20102 and November 2013, the amount of federal unemployment insurance benefits paid to North Carolinians fell by 97.1 percent, dropping to a (nominal) total of $3.1 million from a (nominal) total of $106 million.

“Despite recent declines in local unemployment rates, labor market conditions remain weak across much of North Carolina,” said Quinterno. “The declines in local unemployment rates actually are obscuring a number of alarming developments—developments that are consistent with an under-performing economy.”

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