South By North Strategies, Ltd.

Sadly, No Employment Surprises

CHAPEL HILL (January 5, 2010) –  November brought few positive changes in local employment conditions across North Carolina. Last month, 68 counties posted double-digit unemployment rates; of these, 33 had unemployment rates of at least 12 percent. These findings come from preliminary data released today by the Employment Security Commission.

“Job losses in North Carolina appear to have bottomed out in July, but few improvements have occurred since then,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Local labor markets are just drifting along the bottom of the recession.”

The statewide labor market struggled in November. Last month, employers shed 8,800 more positions than they added with the private sector accounting for 8,500 of the lost positions. Since the recession’s onset, North Carolina has lost, on net, 250,000 payroll jobs – a number equivalent to 6 percent of all the jobs that existed in December 2007. Last month, 10.7 percent of the labor force was unemployed (unadjusted rate).

In November, every part of the state experienced weak labor markets. Unemployment rates exceeded 10 percent in 68 counties, and in 33 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged  from 6.3 percent in Orange County to 16.6 percent in Edgecombe County. Altogether, unemployment in the state’s non-metropolitan counties was higher than in its metropolitan ones — 11.8 percent versus 10.2 percent.

Unemployment also remained at elevated levels in all 14 of the state’s metropolitan areas. In November, six metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.4 percent) followed by Rocky Mount (13.6 percent). The lowest metro unemployment rate was 7.6 percent in Durham-Chapel Hill.

“Because of the lack of seasonal adjustments, monthly fluctuations in local unemployment rates must be interpreted cautiously, especially at this time of year,” warns Quinterno. “The better comparison is to contrast data from November 2009 to November 2008.”

Compared to one year ago, unemployment rates were higher in every North Carolina County and metro area. And compared to a year ago, 59 counties and 10 metro areas had smaller labor forces. Among metropolitan areas, Jacksonville posted the largest decline in the size of its labor force (-2.8 percent), followed by Hickory-Morganton-Lenoir (-1.2 percent) and Durham-Chapel Hill (-1 percent).

“When combined with other employment data, the November report shows a labor market that is going nowhere fast,” adds Quinterno. “Although the number of newly-unemployed individuals has fallen, the number of unemployed individuals who remain jobless has increased. This has led to a surge in the number of households experiencing financial hardships. For instance, some 578,000 North Carolina households received food stamps last month, a 23-percent increase from a year ago.”

In the long-term, private-sector job creation, especially in the state’s three major metro areas, is essential to any meaningful recovery. Yet that growth is not occurring. In November, the unemployment rate stood at 12.4 percent in Charlotte, 11.1 percent in the Piedmont Triad, and 8.4 percent in the Research Triangle. Compared to one year ago, all three major regions had unemployment rates that were at least 1.4 times greater and smaller labor forces.

“Right now there is a tremendous amount of idle labor in North Carolina,” says Quinterno. “Even though conditions have stabilized in recent months, what growth is occurring is insufficient to bring down joblessness and is extremely dependent upon federal recovery programs, which will begin to phase out later in 2010.”

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.”

National Job Losses Moderate

CHAPEL HILL (December 4, 2009) – New national employment data show that November was the 22nd-straight month in which the economy shed more jobs than it added. Last month, 11,000 positions were lost, and 10 percent of the labor force was unemployed.

“The job market paused to catch its breath in November, and job losses were mild by the standards of this recession,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Unfortunately, the overall employment situation remains bleak.”

In November, the nation’s employers eliminated 11,000 more payroll positions than they added. Also, revisions to the September and October data revealed that the economy lost fewer positions than first reported.

November job losses were concentrated in the manufacturing (-41,000); construction (-27,000); and information (-17,000) industries. These losses primarily were offset by gains in the professional and business services (+86,000) and health care (+21,000) fields. Much of the increase in professional services employment was driven by hiring in the temporary help services sub-industry (+52,000).

“Although the pace of jobs losses has moderated recently, the labor market remains incredibly weak,” notes Quinterno. “Since the recession started almost two years ago, the American economy has jettisoned 7.2 million jobs – an amount equal to 5.2 percent of all the positions that existed in December 2007.”

That decline is reflected in the household data released this morning. In November, 15.4 million Americans – 10 percent of the labor force – were jobless and actively seeking work. Proportionally more adult male workers were unemployed than female ones (10.5 percent versus 7.9 percent). Similarly, unemployment rates were higher among Black (15.6 percent) and Hispanic workers (12.7 percent) than among White ones (9.3 percent). Additionally, employment participation levels were the lowest ones recorded since the mid-1980s.

“Jobless workers are finding it incredibly difficult to find new positions,” adds Quinterno. “Last month, 38 percent of all unemployed workers had been out of work for at least six months, and the average spell of unemployment was 28.5 weeks. Because the number of job seekers far exceeds the number of job openings, many more individuals simply have given up on finding work. Counting those individuals would bring the underemployment rate to 17.2 percent.”

Today’s national data suggest that another weak employment report is in store for North Carolina. Since the recession’s start, North Carolina employers have eliminated, on net, 238,100 positions, and the statewide unemployment rate has climbed to 11 percent.

“In recent months, job losses and unemployment have abated and seem to have settled at extremely high levels,” observes Quinterno. “At the same time, little points to an imminent reversal. Consumer demand remains week, the housing market is dragging on growth, and the non-residential real estate bubble is deflating. Even more alarmingly, the federal recovery package probably has achieved its maximum effect, and elements of the package like extended unemployment insurance soon will start to phase out.”

“Based on current trends, it appears that high levels of joblessness will remain the norm into the future,” cautions Quinterno. “In fact, a growing number of studies suggest that unemployment rates will linger around the 10 percent mark through 2011, absent additional federal action.”

Local Job Markets Stuck in Place

CHAPEL HILL (December 1, 2009) – October saw few positive changes in local employment conditions across North Carolina. Last month, 64 counties posted double-digit rates of unemployment; of those, 30 had unemployment rates of at least 12 percent. These findings come from preliminary data released today by the Employment Security Commission.

“Since reaching a low point in July, North Carolina’s labor market has gained some jobs,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Unfortunately, unemployment remains fixed at recessionary levels.”

The statewide labor market made minor progress in October. Last month, employers added 12,100 more positions than they eliminated. Private payrolls netted 6,300 positions and public payrolls gained 5,800 jobs. Since the recession’s onset, North Carolina has lost, on net, 238,100 payroll jobs – a number equivalent to 5.7 percent of all the jobs that existed in December 2007. Last month, 10.7 percent of the labor force was unemployed (unadjusted rate).

In October, every part of the state experienced weak labor markets. Unemployment rates exceeded 10 percent in 64 counties, and in 30 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged from 6 percent in Currituck County to 17.2 percent in Scotland County.

Unemployment also remained at elevated levels in all 14 of the state’s metropolitan areas. Six metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.5 percent) followed by Rocky Mount (13.7 percent). The lowest metro unemployment rate was 7.6 percent in Durham-Chapel Hill.

“Fluctuations in local unemployment rates must be interpreted cautiously,” notes Quinterno. “The lack of seasonal adjustment limits the usefulness of month-to-month comparisons. Nor does the unemployment rate capture changes in the size of the labor force. Between September and October, for instance, unemployment rates rose in 74 counties, but labor forces contracted in 41 counties. Individuals who exit the labor force are not included in the official count, so the decision of large numbers of individuals to abandon job searches can lead to an understatement of joblessness.”

The more accurate comparison is to contrast local data from October 2009 to October 2008. In every North Carolina county and metro area, unemployment rates were higher in October than they were a year ago. And compared to a year ago, 55 counties and 13 metro areas had smaller labor forces. Among metropolitan areas, Jacksonville posted the largest decline in the size of its labor force (-4.4 percent), followed by Asheville and Greensboro-High Point (both down by 2.1 percent).

“Even with some positive October data, private-sector hiring remains anemic, especially in the state’s three largest metropolitan areas. While the federal recovery package has prevented greater deterioration in local job markets, no recovery will occur without robust job growth in the state’s three major metros.”

In October, the unemployment rate stood at 12.7 percent in Charlotte, 11.1 percent in the Piedmont Triad, and 8.4 percent in the Research Triangle. Compared to one year ago, all three major regions had unemployment rates that were at least 1.5 times greater, along with smaller labor forces. Moreover, much of the job creation that has occurred in these areas over the past year has been in the public sector and the education and health care – fields intimately tied to public financing.

“Right now there is a tremendous amount of idle labor in North Carolina,” says Quinterno “Even though payroll employment has improved slightly in recent months, the level of growth is insufficient to bring down joblessness.”

“The best that can be said about local labor markets in North Carolina is that conditions appear to have stabilized,” adds Quinterno. “It appears as if local job markets will be going nowhere fast anytime soon.”

NC’s Job Market Goes Nowhere Fast

CHAPEL HILL (November 19, 2009) – October’s employment report from the Employment Security Commission offers more evidence that a jobless recovery is taking shape in North Carolina.

Last month, North Carolina employers added 12,100 more positions than they eliminated. This was the second time in three months in which the state netted some jobs. Nevertheless, the job market is not generating enough positions to absorb new workers or those displaced over the past year.

“Since reaching a low point in July, North Carolina’s job market has posted some gains,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “October marks the first time in 15 months in which private payrolls grew slightly. While conditions may have stabilized, they are not necessarily improving.”

In October, North Carolina employers added 12,100 more positions than they shed. The public sector added 5,800 positions while the private sector netted 6,300 positions. Among private-sector industries, education and health services posted the largest gain (+5,800) while construction shed the most positions (-6,600). Additionally, a downward revision to the September employment report resulted in the net loss of another 2,500 positions.

“North Carolina’s job market is going nowhere fast,” adds Quinterno. “Even with some positive October data, private-sector hiring remains anemic. In fact, most hiring in the state is being driven by the public sector, either through direct hiring or through the financing of health care services. If not for government spending, employment conditions would be much worse.”

Despite the recent moderation in job losses, conditions have deteriorated markedly since October 2008, which is when North Carolina’s job market began its slide.

Compared to one year ago, the state has 188,100 fewer jobs (-4.6 percent) and 203,000 fewer private-sector ones (-6 percent). In terms of individual industries, manufacturing (-67,600) and construction (-42,200) lost the greatest number of positions over the past year, while construction declined the most in relative terms (-18 percent). Government employment has grown the most in both absolute (+14,400 positions) and relative (+2 percent) terms.

“The past year has been a horrible one for North Carolinians who depend upon paid employment to earn a living,” notes Quinterno. “Severe job losses have pushed unemployment to the highest levels posted since 1976, which is when modern records began being kept.”

The extent of joblessness is reflected in the household data for October. Last month, the labor force contracted by 1,106 individuals as discouraged workers abandoned job searches. Furthermore, the October unemployment rate of 11 percent tied June 2009 for the second-highest monthly state unemployment rate seen since 1976. And compared to a year ago, fewer Tar Heels are in the labor force or employed, and 1.5 times as many are unemployed.

“Right now, there is a tremendous amount of idle labor in North Carolina, both in terms of unemployed individuals and those who are effectively jobless but are not included in the official statistics,” continues Quinterno. “Even though labor market conditions have improved slightly over the past three months, the level of growth is insufficient to make much of a dent in the current situation.”

“Consumer demand is weak, economic conditions are uncertain, and employers have many alternatives to adding full-time positions,” says Quinterno. “Absent increased demand, North Carolina’s labor market will limp along well into the future.”

Local Job Markets Tread Water

CHAPEL HILL (October 23, 2009) – September saw few changes in local employment conditions across North Carolina. Last month, 64 counties posted double-digit rates of unemployment; of these, 28 had unemployment rates of at least 12 percent. These findings come from data released today by the Employment Security Commission of North Carolina.

“Local labor markets experienced few real changes in September,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Unemployment remains at recessionary levels, and local conditions are much worse than they were a year ago.”

The statewide labor market treaded water in September. Last month, employers eliminated 600 more positions than they created. Private employers slashed 13,600 positions while public-sector employers added 13,000 positions. Since the recession’s onset, North Carolina has lost, on net, 248,300 payroll jobs – an amount equivalent to 6 percent of all the jobs that existed in December 2007. Last month, 10.4 percent of the labor force was unemployed (unadjusted rate).

In September, every part of the state wrestled with weak labor markets. Unemployment rates exceeded 10 percent in 64 counties, and in 28 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged  from 5 percent in Currituck County to 16.5 percent in Scotland County.

Unemployment also remained at elevated levels in all 14 of the state’s metropolitan areas. Six metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.1 percent) followed by Rocky Mount (13.4 percent). The lowest metro unemployment rate was 7.7 percent in Durham-Chapel Hill.

“Changes in local unemployment rates must be taken with a grain of salt,” adds Quinterno. “The lack of seasonal adjustment limits the usefulness of month-to-month comparisons. Nor does the unemployment rate capture changes in the size of the labor force. Between August and September, for instance, unemployment rates fell in 76 counties, yet labor forces contracted in 64 counties. Individuals who exit the labor force are not included in the official count, so the decision of large numbers of individuals to abandon job searches can lead to an understatement of joblessness.”

The more accurate comparison is to contrast local data from September 2009 and September 2008. In every North Carolina county and metro area, unemployment rates were higher in September 2009 than they were a year ago. And compared to a year ago, half of all counties and 13 metro areas had smaller labor forces. Among metropolitan areas, Jacksonville posted the largest decline in the size of its labor force (-4 percent), followed by Asheville and Goldsboro (both smaller by 2.3 percent).

“Absent the federal recovery package, local job markets would be in much worse shape,” notes Quinterno. “Long-term recovery, however, will not occur without robust job growth, particularly private-sector growth, in North Carolina’s three largest metropolitan regions. The September data offer little evidence of such a rebound.”

In September, the unemployment rate stood at 12.2 percent in Charlotte, 10.9 percent in the Piedmont Triad, and 8.4 percent in the Research Triangle. Compared to one year ago, all three major regions had unemployment rates that were at least 1.6 times greater and smaller labor forces. Moreover, much of the job creation that has occurred in these areas over the past year has been in the public sector and education and health care, fields intimately tied to public financing.

“The best that can be said about local labor markets in North Carolina is that conditions appear to have stabilized, though at unacceptably high levels,” observes Quinterno. “Unfortunately, it appears as if local job markets will be treading water well into the future.”

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