Bouncing Along the Bottom
CHAPEL HILL (December 18, 2009) — The November jobs report released today by the Employment Security Commission offers little proof that a labor market recovery is underway.
Last month, North Carolina employers eliminated 8,800 more positions than they added with private-sector employers responsible for almost all of the losses (-8,500 positions). Although the state’s labor market has alternated between periods of slight payroll gains and modest losses over the last four months, the fundamental reality is that North Carolina’s labor market is stuck in place.
“Job losses in North Carolina appear to have bottomed out in July, but little has changed since then,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “The state’s labor market is just bouncing along the bottom of the recession.”
In November, North Carolina employers shed 8,800 more positions than they added. The public sector lost, on net, 300 positions, and the private sector cut, on net, 8,500 positions. Among private industries, leisure and hospitality services eliminated the most positions (-4,800), followed by manufacturing (-3,900) and trade, transportation and warehousing (-1,000). Education and health services posted the largest numerical gain (+1,900), followed by construction (+800). Additionally, a downward revision to the October report led to the net loss of another 3,100 positions.
“North Carolina’s job market is treading water,” adds Quinterno. “Although conditions seemingly have stabilized, private-sector hiring remains hard to find. So far in 2009, private payrolls have lost 143,400 more positions than they have added. More alarmingly, monthly net private-sector payroll growth has been positive just three times since January 2008. The private sector clearly is not in a position to ignite or sustain a labor market rally.”
Despite the recent moderation in job losses, conditions have deteriorated markedly since last year. Compared to November 2008, the state had 154,200 fewer jobs (-3.8 percent). In terms of individual industries, manufacturing (-57,600) and construction (-37,400) lost the greatest number of positions over the past year, while construction declined the most in relative terms (-16.5 percent). Government employment grew the most in absolute (+13,600 positions) and relative (+1.9 percent) terms.
“Working North Carolinians had even less to be thankful for this November than they did last year,” notes Quinterno. “Severe job losses have pushed unemployment to levels above those seen in any of the last three recessions.”
The extent of joblessness is reflected in November’s household data. Last month, the labor force grew slightly due to new entrants and the return of some discouraged workers. Nevertheless, the share of the population participating in the labor force held steady. Additionally, North Carolina saw the unemployment rate (10.8 percent) and number of unemployed individuals (487,631) remain fairly constant between October and November.
“There is a tremendous amount of idle labor in North Carolina right now,” observes Quinterno. “Little demand for that labor appears to exist, which means that North Carolina’s job market is apt to bounce along at recessionary levels well into the foreseeable future.”