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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

08.10.2010 News Releases, Policy Points Comments Off on National Jobs Picture Still Bleak

National Jobs Picture Still Bleak

CHAPEL HILL (October 8, 2010) – The national employment report for September offered little evidence that a labor market recovery is underway. Last month, employers eliminated 95,000 more payroll positions than they added. An expected fall in temporary census employment drove much of the decline; after accounting for it, the economy lost 18,000 positions.

“There was little positive news in the September employment report,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Payroll employment fell even after accounting for the expected elimination of 77,000 census jobs. While private-sector employment levels appear to have stabilized, reductions in public-sector payrolls appear are weighing down the labor market.”

In September, the nation’s employers shed 95,000 more payroll positions than they added. Losses occurred primarily in the public sector (-159,000) due to the elimination of 77,000 temporary census jobs and 76,000 local government positions. When census reductions are excluded, the economy lost 18,000 positions. Additionally, the payroll employment numbers for August were revised downwards; with the revision, the economy lost 57,000 jobs in August rather than the 54,000 positions first reported.

The largest private-sector losses in September occurred in construction (-21,000, primarily in non-residential construction), followed by manufacturing (-6,000). The greatest gains occurred in leisure and hospitality services (+38,000); education and health services (+17,000); trade, transportation and warehousing (+16,000); and professional and businesses services (+14,000, primarily in the temporary help services sub-industry).

“The September employment report offers little evidence that a meaningful labor market recovery is underway,” noted Quinterno. “Job growth simply is not occurring at a level capable of accommodating all those individuals who wish to work.”

Weak conditions were reflected in the September 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 (9.8 percent vs. 8 percent). Similarly, unemployment rates were higher among Black (16.1 percent) and Hispanic workers (12.4 percent) than among White ones (8.7 percent). The unemployment rate among teenagers was 26.3 percent. Unemployment rates for most of these categories were unchanged from the prior month.

Furthermore, newly available data show that 8 percent of all veterans were unemployed in August; the rate among veterans who had served since September 2001 was 10.2 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 September, the underemployment rate equaled 17.1 percent, up from 16.7 percent in August.”

Jobs remained difficult to find in September. Last month, 41.7 percent of unemployed workers had been jobless for at least six months with the average spell of unemployment lasting for 33.3 weeks. Both the number of people working part time for economic reasons and the number of people marginally attached to the labor force rose in September.

“Recent reductions in temporary census jobs and local government positions have exposed just how weak the labor market really is,” observed Quinterno. “While private employers are not slashing jobs at the ruthless pace of late 2008 and early 2009, they are not adding positions in the aggregate. Little suggests that this pattern is about to change.”

24.09.2010 News Releases, Policy Points Comments Off on Weak Economic Conditions Prevail in August

Weak Economic Conditions Prevail in August

CHAPEL HILL (September 24, 2010) – Local labor market conditions remained weak across much of North Carolina in August, according to preliminary data released today by the Employment Security Commission. Last month, 50 counties posted double-digit unemployment rates, while 17 counties recorded rates of at least 12 percent.

“The basic local employment picture was unchanged in August,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Although conditions in some communities improved somewhat, joblessness and the accompanying problems remained widespread.”

Since the onset of the recession in December 2007, North Carolina has shed 6.2 percent of its payroll employment base (-259,500 positions) and has watched its unadjusted unemployment rate climb from 4.7 percent to 9.8 percent. Although the state gained 18,600 more positions than it lost in August, almost all of those gains were due to an expected rise in public education employment. After accounting for that development, the state netted just 4,800 positions.

Every part of the state experienced weak labor markets in August. Unemployment rates exceeded 10 percent in 50 counties, and in 17 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged from 4.1 percent in Currituck County to 15.7 percent in Scotland County.

“Labor markets in non-metropolitan communities remain quite weak,” adds Quinterno. “Last month, 10.6 percent of the non-metro labor force was unemployed, compared to 9.4 percent of the metro one. More alarmingly, the non-metropolitan labor force continued to shrink. Between August 2009 and August 2010, the non-metropolitan labor force contracted by 2.5 percent. Many of those missing individuals are effectively jobless.”

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 (12.6 percent). Durham-Chapel Hill had the lowest rate at 7.3 percent.

“Because of the lack of seasonal adjustments, monthly fluctuations in local unemployment rates must be interpreted cautiously, particularly during the volatile summer months,” warns Quinterno. “A better comparison is an annual one.”

Compared to August 2009, unemployment rates were lower in 90 counties and every metro area. Yet compared to a year ago, 71 counties and 8 metro areas had smaller labor forces. Among metros, Hickory-Morganton-Lenoir posted the largest decline in the size of its labor force (-3.6 percent), followed by Rocky Mount (-2.5 percent). Jacksonville posted the largest gain (+6.8 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 is not happening.”

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 August unemployment rate in the major metros equaled 9.4 percent. Of the three areas, the Research Triangle had the lowest unemployment rate (8 percent), followed by the Piedmont Triad (10.2 percent) and Charlotte (11.4 percent).

“The August jobs report illustrates just how weak local economies really are,” observes Quinterno. “Private-sector employers are not creating positions in any meaningful way, so many North Carolinians who are ready, willing, and able to work are finding themselves blocked out of the labor market. The basic pattern has not changed much since early 2009.”

One somewhat bright spot in the August report was the boost that unemployment insurance benefits provided to individual households and the state’s economy. Explains Quinterno: “Over the past 12 months, unemployed North Carolinians received $5.5 billion in regular state payments and federal emergency benefits. Those payments sparked an estimated $9 billion in statewide economic activity.”

20.09.2010 News Releases, Policy Points Comments Off on Little Good Job News In August

Little Good Job News In August

CHAPEL HILL (September 17, 2010) — August was another difficult month for North Carolina’s job market. Last month, the state gained 18,600 more payroll positions than it lost. Yet almost all of the increase was due to an expected rise in public education employment; after accounting for that development, the state netted just 4,800 positions. Moreover, a decline in the size of the labor force suggests that joblessness is more widespread than reflected in the official unemployment rate.

“Despite a seemingly impressive headline number, the basic employment picture was unchanged in August,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “The data are neither consistent with economic recovery, nor suggestive of an imminent rebound.”

In August, employers added 18,600 more positions than they added. The public sector accounted for 74 percent of the gain due to expected hiring by public schools. Private-sector payroll employment, meanwhile, grew by 4,800 positions. Among private industries, trade, transportation, and utilities added the most positions (+1,400), followed by manufacturing (+1,100) and information (+1,000). The gains were offset by losses in leisure and hospitality services (-1,000) and mining and logging (-400).

Additionally, a revision to the July data increased the net job loss first reported for the month. North Carolina actually lost 31,200 positions in July, not the 29,800 positions first reported. With that revision, North Carolina has shed, on net, 259,500 positions or 6.2 percent of its payroll employment base since December 2007.

“North Carolina’s labor market has gone nowhere in 2010,” notes Quinterno. “North Carolina has netted just 26,200 payroll jobs over the course of the year. The pace of growth – 3,700 positions per month – is insufficient to keep pace with population growth, let alone replace the jobs lost during the recession.”

Labor market conditions have been flat over the past year. Compared to August 2009, the state had 36,700 (+0.9 percent) more jobs. In terms of individual industries, government grew the most in absolute terms (+28,100, +4 percent), while professional and business services grew the most in relative terms (+23,200, +5.1 percent). Construction lost the most positions in both absolute and relative terms (-13,600, -7.3 percent).

August’s household data also were troubling. Last month, the labor force contracted by 0.4 percent as 19,740 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 9.8 percent to 9.7 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 77,500 North Carolinians have left the labor force since May,” observes Quinterno. “The contraction is responsible for much of the recent decline in the unemployment rate. Unfortunately, this is a sign of an unhealthy labor market.”

“The August jobs report illustrates just how weak the economy really is,” explains Quinterno. “Private employers are not slashing jobs at the frenetic pace of late 2008 and early 2009, but they are not adding positions in any meaningful way. Many North Carolinians who are ready, willing, and able to work are finding themselves blocked out of the labor market.”