News Releases

19.11.2010 News Releases, Policy Points Comments Off on Not What A Recovery Looks Like

Not What A Recovery Looks Like

CHAPEL HILL (November 19, 2010) – North Carolina recorded zero net job growth in October, according to data released today by the Employment Security Commission. At the same time, the state’s unemployment rate fell slightly, dipping to 9.6 percent. Unfortunately, this drop was attributable primarily to a decline in the size of the state’s labor force.

“There is little in the October employment report to celebrate,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “The lack of any net job growth is a worrisome development. By this point in a normal business cycle, job growth should be occurring at a brisk pace.”

Last month, employers added no more positions than they cut. A net loss of 2,100 public-sector positions was balanced by a net gain of 2,100 private-sector positions. Among private industries, education and health services added the most positions (+4,000), followed by trade, transportation, and utilities (+1,900), and professional and business services (+800). Those gains largely were offset by losses in leisure and hospitality services (-4,000), financial activities (-1,300), and information (-300).

Additionally, a revision to the September data lowered the net job growth first reported for the month. Instead of gaining 10,100 positions in September, North Carolina actually netted 9,800 positions. With that revision, North Carolina has shed, on net, 267,800 positions – 6.4 percent of its payroll employment base – since December 2007.

“North Carolina’s labor market is showing few signs of recovery,” notes Quinterno. “The gains recorded in early 2010 have disappeared. Since May, payroll employment in North Carolina has fallen by 27,100 positions. The economy clearly is proving unable to generate jobs without public policy supports like those provided through the federal recovery act.”

Since October 2009, North Carolina has gained 9,100 jobs (+0.2 percent). In terms of individual industries, professional and business services grew the most in absolute and relative terms (+18,500, +4  percent), while construction shed the most jobs in absolute and relative terms (-7,700, -4.3 percent).

The household data for October also were troubling. Last month, the labor force contracted by 0.3 percent as 12,152 individuals stopped working or seeking work. The number of employed individuals fell, as did the number of unemployed individuals. Owing largely to the contraction of the labor force, the unemployment rate fell from 9.7 percent to 9.6 percent. The reduction in the size of the labor force is disturbing and suggests that joblessness is much more widespread than reflected in official measures.

“Some 102,000 North Carolinians have left the labor force since May,” observes Quinterno. “That contraction is responsible for much of the recent decline in the unemployment rate and is a sign of an extremely unhealthy labor market. By the same point in time following the 1990-91 and 2001 recessions, the labor force was growing again.”

“The October employment report illustrates just how weak the labor market is,” explains Quinterno. “In the 13 months since the state’s labor market hit bottom, few meaningful improvements have occurred. Public policy supports provided a bounce in late 2009 and early 2010, but the economy is proving unable to create jobs without policy assistance. Little in the October report suggests that a labor market recovery is underway in North Carolina.”

05.11.2010 News Releases, Policy Points Comments Off on Few Surprises In The October Jobs Report

Few Surprises In The October Jobs Report

CHAPEL HILL (November 5, 2010) – The national employment picture changed little in October. Last month, employers added 151,000 more payroll positions than they cut. The unemployment rate, meanwhile, held steady at 9.6 percent due in part to the exiting of 254,000 people from the labor force.

“The October employment report offered little evidence that a robust recovery is underway,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “While payroll employment rose due to private-sector hiring, positions simply are not being added at the pace needed to bring down joblessness anytime soon.”

In October, the nation’s employers added 151,000 more payroll positions than they cut. Gains occurred primarily in the private sector (+159,000), while government payrolls fell by 8,000 positions owing to job reductions among local governments. Additionally, the payroll employment numbers for August and September were revised upwards; with the revisions, the economy lost 42,000 jobs over those two months rather than the 152,000 positions previously reported.

Private-sector gains in October occurred in professional and businesses services (+46,000, primarily in the temporary help services sub-industry), education and health services (+53,000), retail trade (+28,000), and other services (+25,000). Private-sector losses occurred in manufacturing (-7,000), and leisure and hospitality services (-5,000). All other private-industry groups experienced little or no change in October.

“The October employment is a reminder that job growth is not occurring at the level needed to accommodate all of the Americans who wish to work,” noted Quinterno. “The current pace of growth will not put a dent in the problem of joblessness anytime soon.”

Weak conditions were reflected in the October household survey. Last month, 14.8 million Americans (9.6 percent of the labor force) were jobless and seeking work. Proportionally more adult male workers were unemployed than female ones (9.7 percent vs. 8.1 percent). Similarly, unemployment rates were higher among Black (15.7 percent) and Hispanic workers (12.6 percent) than among White ones (8.8 percent). The unemployment rate among teenagers was 27.1 percent. Unemployment rates for most of these categories changed only slightly from the previous month.

Furthermore, newly available data show that 8.3 percent of all veterans were unemployed in October; the rate among veterans who had served since September 2001 was 10.6 percent.

“There remains a tremendous amount of idle labor in the American economy,” added Quinterno. “Compared to a year ago, a smaller share of the civilian population is participating in the labor force. The proportion of the population that is underemployed also has risen. In October, the underemployment rate equaled 17 percent, down slightly from 17.1 percent in September.”

Jobs remained difficult to find in October. Last month, 41.8 percent of unemployed workers had been jobless for at least six months with the average spell of unemployment lasting for 33.9 weeks. The number of people marginally attached to the labor force rose in October, while the number working part time for economic reasons fell.

“Two aspects of the October employment report merit particular attention,” observed Quinterno. “First, the pace of job growth remains too tepid to reverse the problem of widespread joblessness. Second, weak job creation is leading people to abandon the labor market. In fact, over 200,000 Americans have left the labor force just since August. This is an alarming development with serious consequences for households, businesses, and communities, to say nothing of the larger project of economic recovery.”

29.10.2010 News Releases, Policy Points Comments Off on NC’s Jobless Recovery Rolls Along

NC’s Jobless Recovery Rolls Along

CHAPEL HILL (October 29, 2010) – Local labor market conditions remained weak across much of North Carolina in September, according to preliminary data released today by the Employment Security Commission. Last month, 37 counties posted double-digit unemployment rates, while 7 counties recorded rates of at least 12 percent.

“September was a lackluster month for private-sector job creation in communities across North Carolina,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Although unemployment rates dropped in many places, much of the change was due to drops in the sizes of local labor forces rather than improvements in local conditions.”

Since the onset of the recession in December 2007, North Carolina has shed 6 percent of its payroll employment base (-250,400 positions) and has watched its unadjusted unemployment rate climb from 4.7 percent to 9.1 percent. While the state gained 10,100 more positions than it lost in September, the private sector contributed just 500 jobs to that total.

Every part of the state experienced weak labor markets in September. Unemployment rates exceeded 10 percent in 37 counties, and in 7 counties, at least 12 percent of the labor force was jobless and actively seeking work; over the past year, there has been a notable reduction in the number of counties with unemployment rates in excess of 12 percent. Individual county unemployment rates ranged from 4.1 percent in Currituck County to 14.8 percent in Scotland County.

“Labor markets in non-metropolitan communities remain weak,” adds Quinterno. “Last month, 9.9 percent of the non-metro labor force was unemployed, compared to 8.8 percent of the metro labor force. More alarmingly, the non-metropolitan labor force continued to shrink. Between September 2009 and September 2010, the non-metropolitan labor force contracted by 2.7 percent or 36,965 individuals. Many of those missing persons are effectively jobless.”

Last month, unemployment rates fell in all 14 of the state’s metropolitan areas. Rocky Mount had the highest unemployment rate (11.8 percent), followed by the Hickory-Morganton-Lenoir area (11.7 percent). Durham-Chapel Hill had the lowest rate at 6.7 percent.

Because of the lack of seasonal adjustments, monthly fluctuations in local unemployment rates must be interpreted cautiously. A better comparison is an annual one.

Compared to September 2009, unemployment rates were the same or lower in 96 counties (the exceptions were Hoke, Hyde, Northampton, and Swain counties) and every metro area. Yet compared to a year ago, 76 counties and 6 metro areas had smaller labor forces. Among metros, Hickory-Morganton-Lenoir posted the largest decline in the size of its labor force (-3.4 percent), followed by Burlington (-3.2 percent). Jacksonville posted the largest gain (+7.3 percent).

“Recent drops in unemployment rates have been driven not by improvements in underlying conditions, but by workers abandoning the job market,” cautions Quinterno. “The robust job growth needed to absorb displaced individuals and new workers simply is not happening. North Carolina is mired in a weak, jobless recovery.”

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 job growth in 2010 has been sluggish. Collectively, employment in these three major metro regions has fallen by 4.2 percent since the start of the recession. The overall September unemployment rate in the major metros equaled 8.7 percent. Of the three areas, the Research Triangle had the lowest unemployment rate (7.5 percent), followed by the Piedmont Triad (9.6 percent) and Charlotte (10.7 percent).

“The September employment report illustrates just how weak the recovery really is,” explains Quinterno. “In the year since the state’s labor market hit bottom, few meaningful improvements have occurred. Public policy supports provided a boost in late 2009 and early 2010, but the economy has been unable to stand on its own without them. At this point, the idea that a recovery is underway has little connection to the experience of hundreds of thousands of North Carolinians who are finding themselves boxed out of the labor market.”

22.10.2010 News Releases, Policy Points Comments Off on Another Lackluster Month For Job Creation

Another Lackluster Month For Job Creation

CHAPEL HILL (October 22, 2010) – Private-sector job creation in North Carolina ground to a virtual halt in September. Last month, the state netted just 500 more private payroll jobs than it lost. Government hiring, primarily at the local level, added another 9,600 positions, thereby bringing the month’s total job gain to 10,100 positions. Additionally, the size of the state’s labor force fell for the fifth straight month; this suggests that joblessness is more widespread than shown in official statistics.

“Scratch beneath the surface, and the headline jobs number for September is much less impressive than it appears,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “The net gain of just 500 private-sector jobs is the second-worst total posted so far in 2010. There continues to be scant evidence that a recovery in the labor market is underway.”

In September, employers added 10,100 more positions than they cut. The public sector accounted for 95 percent of the gain due primarily to hiring by local governments. Private-sector payrolls, meanwhile, netted just 500 positions. Among private industries, leisure and hospitality services added the most positions (+5,200), followed by trade, transportation, and utilities (+3,300), and finance (+1,200). Those gains largely were offset by losses in manufacturing (-3,800), construction (-2,400), educational and health services (-900), and professional and business services (-900).

Additionally, a revision to the August data lowered the net job loss first reported for the month. North Carolina actually lost 17,600 positions in July, not the 18,600 positions first reported. With that revision, North Carolina has shed, on net, 250,400 positions or 6 percent of its payroll employment base since December 2007.

“North Carolina’s labor market has sputtered since the spring of 2010,” notes Quinterno. “This shows just how dependent the economy has been on public policy supports like those provided through the federal recovery act. As those supports have dropped away, little has taken their place as sources of demand. Since May, private-sector payroll employment in North Carolina has grown by just 400 positions.

Labor market conditions have improved somewhat over the past year. Compared to September 2009, which is the month when job losses in North Carolina hit bottom, the state has gained 49,300 (+1.3 percent) jobs. In terms of individual industries, government grew the most in absolute and relative terms (+37,700, +5.3 percent), while construction shed the most jobs in absolute and relative terms (-12,100, -6.6 percent).

The household data for September also were troubling. Last month, the labor force contracted by 0.3 percent as 13,186 individuals stopped working or seeking work. The number of employed individuals fell, as did the number of unemployed individuals. Owing largely to the contraction of the labor force, the unemployment rate fell from 9.7 percent to 9.6 percent. The reduction in the size of the labor force is disturbing and suggests that joblessness is much more widespread than reflected in official measures.

“Some 94,733 North Carolinians have left the labor force since April,” observes Quinterno. “That contraction is responsible for much of the recent decline in the unemployment rate. Unfortunately, this is a sign of an unhealthy labor market. By the same point in time following the 1990-91 and 2001 recessions, the state’s labor force was beginning to grow again.”

“The September employment report illustrates just how weak the economy really is,” explains Quinterno. “In the year since the state’s labor market hit bottom, few meaningful improvements have occurred. Public policy supports provided a bounce in late 2009 and early 2010, but the economy has been unable to stand on its own without them. At this point, the idea that a recovery is underway is an academic one with little relevance to the experience of hundreds of thousands of jobless North Carolinians.”

13.10.2010 News Releases, Policy Points Comments Off on Is Structural Unemployment NC’s Problem?

Is Structural Unemployment NC’s Problem?

Last week, the WUNC radio program The State of Things devoted an entire episode to a discussion of North Carolina’s labor market. In the show’s second half, several speakers and callers claimed that the high level of joblessness affecting the state stems from a lack of workers qualified to hold available jobs.

The only problem with this reasonable-sounding argument is the lack of evidence to support it.

Labor economists argue that there are two broad kinds of unemployment: structural and cyclical. Think of structural unemployment as a supply shortage: jobs exist, but workers are not available to fill them, perhaps because they lack the requisite skills or perhaps because they live in the wrong place. Cyclical employment, in contrast, may be thought of as a demand shortage: workers are available but employers are not hiring. (Note that a third kind of unemployment, frictional unemployment, which results from voluntary job changes, also exists.)

Both structural and cyclical factors drive unemployment at different points in time. And over the long term, significant structural changes have occurred within North Carolina’s economy. Federal trade policies, for instance, have facilitated the off-shoring of textile production previously done in the Tar Heel state. Similarly, a decline in traditional industries located in rural areas has occurred alongside the growth of newer industries located in metropolitan areas.

Despite those long-term structural changes, the downturn that started in December 2007 is very much a cyclical one. Put differently, employer demand for labor has collapsed due to drops in demand for goods and services. Three pieces of data support this claim. read more