10.20.2017 News Releases, Policy Points

Job Growth In North Carolina Slowed In Sept.

CHAPEL HILL, NC (October 20, 2017) – In September 2017, employers in North Carolina collectively added 2,500 more payroll jobs than they cut (+0.1 percent), due entirely to net hiring in the public sector. The monthly household survey, meanwhile, recorded no real change in the number of unemployed North Carolinians and in the statewide unemployment rate, which remained at 4.1 percent, the lowest figure posted since late 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 September, with the state netting just 2,500 payroll positions,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “2017 is well on its way to being the the worst year for statewide job growth since the start of the recovery from the ‘Great Recession.’ Over the first nine months of the year, North Carolina has netted a total of 39,800 payroll jobs, which is the smallest net gain posted during the first three-quarters of a year since 2011.”

Since North Carolina’s labor market recovery began in early 2010, the state has netted an average of 6,400 jobs per month, resulting in a cumulative gain of 581,000 positions (+15.1%) 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 254,300 more payroll jobs than it did when the recession began in December 2007 (+6.1 percent).

“The labor market data released for September continue a yearlong pattern in which the payroll data paint a more negative view of North Carolina’s labor market than do the household data,” noted Quinterno. “Job growth slowed for the fourth month in a row, but the unemployment rate remained at a 17-year low. Squaring these confounding data is essential to understanding the landscape working North Carolinians are navigating.”

Judging by the household survey, North Carolina’s labor market appears to have improved during 2017. Since the start of the year, the unemployment rate has fallen to 4.1 percent from 5.2 percent, with the number of unemployed persons declining to 200,905 from 256,852 (-21.8 percent). For context, the unemployment rate in February 2010 was 11.3 percent, with the number of unemployed individuals totaling 522,896.

“The low unemployment of 4.1% rate–a rate that has been logged in North Carolina for three months in a row–is the one piece of labor market data that has grabbed popular attention in recent months,” observed Quinterno. “The last time the state posted a 4.1 percent unemployment rate was in November 2000. Today, however, there is little evidence of the gains in wages, incomes, and living standards that characterized that earlier period—an expansionary one that would end the next year in a recession.”

Another 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 62 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 drop is tied to demographic changes, weaker economic conditions also are contributing. And both of these important indicators had been trending downward prior to September.

“In 2017, North Carolina’s unemployment rate has fallen to the lowest one recorded in 17 years despite a marked slowdown in job creation,” said Quinterno. “While the low unemployment rate seems promising, the underlying dynamics are less so, which explains why low rates of unemployment are not generating widespread improvements in living standards.”

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