11.22.2011 News Releases, Policy Points

N.C.’s Labor Market Still Down And Out

CHAPEL HILL (November 22, 2011) – North Carolina’s job market experienced few changes in October. While the number of jobs in the state rose slightly, unemployment remained at a distressingly high level. During the first 10 months of 2011, North Carolina netted just 14,400 jobs (+0.4 percent), while the number of unemployed individuals has jumped by 29,320 (+6.7 percent). These findings come from new data from the Division of Employment Security.

“North Carolina’s labor market remained down and out in October,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “The total number of jobs in the state remained essentially flat. Though that was an improvement over the large job losses posted in September, the bottom line is that the situation confronting job seekers remains terrible.”

In October, North Carolina employers added 5,500 more payroll jobs than they cut. Net gains occurred primarily in the public sector (+4,800, +0.7 percent), though the private sector also netted 700 jobs (<0.1 percent). Within the private sector, professional and business services gained the most jobs in absolute terms (-3,600, +0.7 percent), followed by education and health services (+3,500, +0.7 percent). Leisure and hospitality services shed the greatest number of jobs (-3,700, -0.9 percent), followed by construction (-1,800, -1 percent) and manufacturing (-1,700, -0.4 percent).

A positive revision to the September data found that the state lost 2,600 fewer jobs than first reported (-19,600 versus -22,200). Nevertheless, September was still the worst month for job loss so far in 2011. With the data revision, North Carolina has lost, on net, 300,500 positions, or 7.2 percent of its payroll base, since December 2007. Since bottoming out in February 2010, the state has netted an average of 1,100 payroll jobs per month, resulting in a cumulative gain of 22,500 positions (+0.6 percent)

“Compared to December 2007, North Carolina has fewer payroll jobs in every major industry group except for educational and health services and leisure and hospitality services,” noted Quinterno. “Despite experiencing some growth in October, public-sector employment generally has been a drag on growth during the recovery. Since February 2010, local government employment has fallen by 3.4 percent with state government employment down by 4 percent. Over that span, declines in the public sector have offset half of the gains in the private sector.”

Between October 2010 and October 2011, North Carolina gained, on net, 11,300 jobs (+0.3 percent). Net public-sector losses (-10,000) offset 46.9 percent of the net private-sector gains (+21,300 positions). In terms of individual private industries, professional and business services grew the most in absolute terms (+9,400, +1.9 percent), while construction lost the most jobs (-4,900, -2.8 percent). In the public sector, net losses stemmed from drops in state (-5,000, -2.6 percent) and local government employment (-5,700, -1.3 percent).

The household data for October also were weak. Last month, the size of the workforce fell slightly (-2,543, -0.1 percent) to 4.50 million. While the total number of employed individuals rose somewhat (+5,730, +0.1 percent) and the number of unemployed individuals fell sharply (-8,273, -1.7 percent), unemployment remained at an elevated level of 10.4 percent.

Between October 2010 and October 2011, the size of the labor force increased by 37,909 individuals (+0.8 percent). Over the year, the unemployment rate rose by 0.5 percentage points, climbing to 10.4 percent from 9.9 percent. October was the fourth consecutive month with a statewide unemployment rate in excess of 10 percent. The monthly statewide unemployment rate has been at least 9.7 or higher in every month since February 2009.

“North Carolina’s labor market has made no meaningful progress so far in 2011,” observed Quinterno. “The job gap has closed only slightly since January, and the unemployment rate is higher now than at the start of the year. Especially alarming is the fact that the share of working-age North Carolinians with a job remains at the lowest level recorded since 1976. In October, only 55.3 percent of working-age North Carolinians had jobs, down from 62.4 percent in December 2007. That represents a tremendous waste of human talent and economic potential.”

“The October job report is yet more proof that the labor market is in crisis–a crisis that, by many indicators, has worsened during 2011. Unfortunately, policymakers, particularly those at the federal level, appear to have turned a blind eye to the situation and instead are on track to adopt policies likely to exacerbate the problems for the rest of the year and into 2012.”

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