04.06.2011 News Releases, Policy Points

Recovery Still A Long Way Off

CHAPEL HILL (April 6, 2011) – In February, unemployment rates exceeded 10 percent in 67 of North Carolina’s 100 counties and 6 of its 14 metro areas. And, compared to a year ago, 87 counties and 11 metro areas had smaller labor forces. These findings come from estimates released today by the Employment Security Commission.

“While February was the best month of job growth seen in North Carolina in some time, that growth did not radically alter local labor market conditions,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Sizable portions of local labor forces are out of work, and new jobs remain difficult to find.”

Since the economy fell into recession in December 2007, North Carolina has shed 7 percent of its payroll employment base (-292,500 positions) and has seen its unadjusted unemployment rate climb from 4.7 percent to the current level of 10.1 percent. In February, the state gained 17,400 more payroll jobs than were lost.

Every region of the state experienced slack labor market conditions in February. Unemployment rates were at or above 10 percent in 67 counties; compared to a year ago, however, 93 counties had lower unemployment rates. Individual county rates in February ranged from 6.2 percent in Orange County to 18.1 percent in Swain County.

“Labor markets in non-metropolitan communities remain especially weak,” added Quinterno. “Last month, 11.2 percent of the non-metro labor force was unemployed, compared to 9.6 percent of the metro labor force. Alarmingly, the non-metropolitan labor force continued to shrink. Since December 2007, the non-metropolitan labor force has declined by 4.5 percent, or 60,415 individuals.”

Last month, unemployment rates fell in all 14 of the state’s metropolitan areas. Rocky Mount had the highest unemployment rate (12.7 percent), followed by the Hickory-Morganton-Lenoir area (12.3 percent). Durham-Chapel Hill had the lowest rate (7.3 percent).

Because of the lack of seasonal adjustments, monthly fluctuations in local unemployment rates must be interpreted cautiously. A useful comparison is between February 2010 and 2011.

Compared to February 2010, unemployment rates were lower in 93 counties and 13 metro areas. Yet 87 counties and 11 metro areas had smaller labor forces. Among metros, Hickory-Morganton-Lenoir (-2.7 percent) had the largest decline, followed by Winston-Salem (-2.4 percent) and Rocky Mount (-2.1 percent). Asheville posted the largest gain (+0.5 percent).

“While nine of North Carolina’s metro areas—led by Raleigh-Cary, Asheville, and Burlington, —recorded modest rates of employment growth over the past year, overall growth levels were insufficient to drive down joblessness,” cautioned Quinterno. “Much of the recent improvement in unemployment rates is due to the exiting of workers from the labor market. Many such individuals are effectively jobless.”

In the long term, any meaningful recovery will be driven by growth in the state’s three major metro regions: Charlotte, the Research Triangle, and the Piedmont Triad. Yet growth has been sluggish. Collectively, employment in these three metro regions has fallen by 5.6 percent since December 2007. The combined February unemployment rate in the three major metros equaled 9.3 percent. Of the three areas, the Research Triangle had the lowest unemployment rate (8 percent), followed by the Piedmont Triad (10.3 percent) and Charlotte (11 percent).

“Since December 2009, the month when then the state’s labor market bottomed out, local unemployment rates have fallen across much of the state, but during the same time, the total size of the state’s labor force has fallen as well,” noted Quinterno. “Declines in unemployment caused by jobless individuals abandoning their searches really are not much to celebrate and point to just how weak labor conditions remain almost two years into a recovery.”

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