10.16.2009 News Releases

Jobless Recovery Takes Hold in NC

CHAPEL HILL (October 16, 2009) – September’s employment report offered more proof that a jobless recovery has taken hold in North Carolina.

Last month, private-sector employers eliminated 13,600 more positions than they created. However, hiring in the public sector offset most of these losses, leading to a total statewide loss of just 600 positions. These findings come from data released today by the Employment Security Commission.

“Private-sector job creation has ground to a halt in North Carolina” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Private-sector payrolls have contracted for 14 straight months, and no meaningful growth has occurred at all since 2007. If not for government hiring made possible by the federal recovery act, employment conditions would be much worse.”

In September, North Carolina employers eliminated 600 more positions than they added. Private-sector employers eliminated 13,600 positions, with losses occurring in every major industry except for construction. These losses were offset by a net gain of 13,000 public-sector positions, primarily at the state (+4,600 positions) and local levels (+8,600 positions).

In a related, mildly positive development, the August payroll figures were revised upwards by 5,700, thereby lifting the total number of jobs gained in August from 7,000 to 12,700.

Recent months have seen a moderation in the rate of job losses in many industries, especially manufacturing and construction. Yet employment in almost every major industry remains well below the levels of a year ago. Between September 2008 and September 2009, total statewide employment fell by 208,300 positions (5 percent). Private-sector employment decreased by 218,500 positions (6.8 percent).

In terms of individual industries, manufacturing (-70,200) and trade, transportation, and utilities (-41,800) lost the greatest number of positions over the past year, while construction declined the most in relative terms (-15 percent).

“The best that can be said right now is that job losses have leveled off,” notes Quinterno. “At the same time, there is little evidence that conditions will improve anytime soon. North Carolina’s employment market appears stuck in place.”

The moderation in the pace of labor market decline is reflected in the household data for September. Last month, the labor force grew by 12,553 individuals as discouraged workers resumed job searches.  Nevertheless, the statewide unemployment rate held steady at 10.8 percent. Compared to a year ago, fewer Tar Heels are in the labor force or employed, and more are unemployed. In fact, the number of unemployed persons grew by 59 percent over the last year.

“Absent the federal recovery package, North Carolina’s job market would be in much worse shape,” continues Quinterno “That assistance is welcome, but in the long-run, little will change without robust private-sector hiring. Unfortunately, there is no evidence that private-sector employment is about to rebound anytime soon. Consumer demand is weak, economic conditions are uncertain, and employers have many alternatives to adding full-time positions.”

“This is what a jobless recovery looks like,” says Quinterno.

Contact: John Quinterno, Principal, (919)-622-2392

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