08.18.2017 News Releases, Policy Points

NC’s Labor Market Continues To Confound

CHAPEL HILL, NC (August 18, 2017) – In July 2017, employers in North Carolina collectively added 8,800 more payroll jobs than they cut (+0.2 percent), due primarily to net hiring in the private sector. The monthly household survey, meanwhile, recorded a decrease in both the number of unemployed North Carolinians and in the statewide unemployment rate, which fell to 4.1 percent, the lowest figure posted since the end of 2000.

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

“Job growth in North Carolina slowed in July,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the first seven months of 2017, North Carolina netted a total of 31,700 payroll jobs, which was the smallest net gain over the first seven months of a year since 2011. Based on payroll data, North Carolina’s recovery—a recovery that already was sluggish—clearly has slowed this year.”

Between June 2017 and July 2017, North Carolina employers added 8,800 more payroll jobs than they cut (+0.2 percent). Private-sector payrolls gained, on net, 6,900 positions (+0.2 percent), and public-sector payrolls netted 1,900 jobs (+0.3 percent), due to hiring at the local level. Within private industry, the trade, transportation, and utilities sector netted the most jobs (+3,300, +0.4 percent), followed by the education and health services (+2,700, +0.5 percent) and the leisure and hospitality services (+2,500, +0.5 percent) sectors. The construction sector, meanwhile, shed 2,400 more positions than it added (-1.2 percent).

Since North Carolina’s labor market recovery began in February 2010, the state has netted an average of 6,400 jobs per month, resulting in a cumulative gain of 573,000 positions (+14.9%) since the worst point of the last recession. Today, the state has 4.4 million payroll jobs, up from 3.8 million in February 2010. Yet even with that gain, North Carolina has just 246,200 more payroll jobs than it did when the recession began in December 2007 (+5.9 percent).

“While the payroll data recorded in North Carolina so far in 2017 point to a slowing recovery, the household employment data logged so far this year paint a more positive picture of the state’s labor market,” noted Quinterno. “Reconciling these diverging data is essential to understanding what is happening in the labor market and what that means for all those North Carolinians who want and need work.”

Judging by the household survey, North Carolina’s labor market appears to have improved during 2017, at least at a superficial level. Since the year’s start, the unemployment rate has fallen to 4.1 percent from 5.2 percent, with the number of unemployed persons declining to 200,752 from 256,852 (-21.8 percent). For context, the rate in February 2010 was 11.3 percent, with the number of unemployed individuals totaling 522,896.

Also in 2017, the number of employed persons has risen by 0.8 percent, climbing to 4.70 million from 4.66 million. Yet the size of the labor force has decreased slightly, falling by 0.4 percent to 4.90 million from 4.92 million. Compared to the start of the year, 19,914 fewer North Carolinians are either employed or actively seeking working; if all those people were in the labor force and counted as unemployed, the state’s unemployment rate in July would have been 4.5 percent.

“The item in this month’s employment report apt to generate the biggest headlines is the drop in the unemployment rate to 4.1 percent, which is the lowest monthly rate posted since November 2000,” observed Quinterno. “Today’s labor market is radically different from the one of 17 years ago, largely because there is little evidence of the widespread gains in wages, incomes, and living standards generated during that earlier period—an expansionary one that would end the next year with the onset of the 2001 recession.”

Another key difference between the two periods is how much more potential labor is sitting idle today. In late 2000, some 68 of every 100 working-age North Carolinians either had a job or were actively seeking one, versus 61 of every 100 today. Similarly, 65 percent of all working-age North Carolinians had a job in late 2000, as opposed to 59 percent today. While some of the decline is tied to demographic changes, weaker economic conditions also likely are contributing. Alarmingly, both of these important indicators have been trending downward.

“So far in 2017, North Carolina’s unemployment rate has fallen to the lowest one recorded in 17 years despite a slowdown in job creation,” said Quinterno. “While the low unemployment rate seems promising, the underlying dynamics are much less so, which explains why seemingly low rates of unemployment are not occurring alongside gains in wages, incomes, and living standards.”

“Even more troubling is the fact that North Carolina’s weak recovery appears to have slowed in 2017. If the national economy tips into a recession in the next several months, North Carolina will enter that recession having never truly recovered from the prior one.”

Print Friendly, PDF & Email
Facebooktwittergoogle_plusredditpinterestlinkedinmail

Comments are closed.