Policy Points

28.01.2014 News Releases, Policy Points No Comments

2013 Another Weak Year For Job Growth

CHAPEL HILL, NC (January 28, 2014) – Over the course of 2013, employers in North Carolina added 64,500 more payroll jobs than they cut (+1.6 percent), due entirely to hiring in the private sector. Yet both the absolute number of jobs added in 2013 and the rate of job growth recorded over the year were below the corresponding values logged in 2012 (+89,900 jobs, +2.3 percent). Put differently, 2013 saw little deviation from the pattern of anemic job growth that has troubled the state since the onset of the labor market recovery in early 2010.

These findings come from new data released today by the Labor and Economic Analysis Division of the NC Department of Commerce.

“The December jobs report offered mixed news about job growth in North Carolina,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “On the one hand, job growth turned positive again in December, and as a result, the year’s final quarter proved to be its best one for job growth. On the other hand, North Carolina netted fewer jobs over the course of 2013 than it did in 2012.”

Between November and December of 2013, North Carolina businesses added 11,100 more jobs than they eliminated (+0.3 percent). Private-sector payrolls netted 10,600 positions (+0.3 percent), and public-sector payrolls netted 500 jobs (+0.1 percent). Within private industry, the trade, transportation, and utilities sector netted the most jobs (+4,500 jobs, or +0.6 percent, with 84.4 percent of the gain occurring in the retail trade subsector), followed by the other services (+2,100 jobs, or +1.5 percent) and finance sectors (+1,900 jobs, or +0.9 percent).

A revision to the November payroll data found that the state lost 1,600 fewer jobs that month than first estimated (-4,900 versus -6,500). With that revision, North Carolina now has, on net, 71,200 fewer payroll positions (-1.7 percent) than it did in December 2007. Since bottoming out in February 2010, the state has netted an average of 5,578 payroll jobs per month, resulting in a cumulative gain of 256,600 positions (+6.7 percent). At that rate, all else equal, it would take until early 2015 for the state to have as many jobs as it did at the end of 2007.

“Over the course of 2013, North Carolina netted jobs, on average, at a rate of 0.1 percent per month,” noted Quinterno. “In 2012, the state gained jobs, on average, at a rate of 0.2 percent per month, and in both 2010 and 2011, the comparable average rate of growth was 0.1 percent per month. While positive growth always is welcome, the state’s labor market has experienced the same basic pattern of slow job growth for the past four years.”

At first glance, the household data recorded in December offered a positive view of the state’s labor market. Last month, the statewide unemployment rate fell by 0.5 percentage points to 6.9 percent, which was the lowest monthly rate recorded since September 2008, when the rate also was 6.9 percent. Additionally, 19,217 more North Carolinians had jobs in December (+0.4 percent) than was the case in November, and 21,097 fewer persons were unemployed (-6.1 percent). And over the month, the size of the state’s labor force essentially held steady at 4.7 million.

While the household data for the month of December generally were positive, the data for the year as a whole were not. The state’s unemployment rate fell by 2.5 percentage points over the course of 2013, but most of the decline originated in a contraction in the size of the state’s labor force. Between December 2012 and December 2013, the number of employed North Carolinians rose by just 13,414 persons (+0.3 percent), yet the number of unemployed North Carolinians fell by 124,344 persons (-27.8 percent). The remaining 110,930 individuals left the labor force entirely, meaning that North Carolina ended 2013 with a labor force that was 2.3 percent smaller than was the case a year earlier. In fact, North Carolina’s labor force now is approximately as large as it was in the middle of 2011.

Declines in the statewide labor force participation rate provide additional evidence of a labor market that underperformed in 2013. In December, the labor force participation rate fell to 61.2 percent, which was the lowest monthly figure recorded at any point since 1976. In fact, the labor force participation rate fell steadily during 2013. Over the year, that important measure of labor utilization fell by 2.1 percentage points, dropping to 61.2 percent from 63.3 percent.

Although another important measure of labor utilization, the employment-to-population ratio, increased between November and December, the current ratio of 57 percent is 0.4 percentage points lower than the corresponding figure logged in December 2012 and just 0.7 percentage points above the 37-year low of 56.3 percent posted in the summer of 2011.

December’s labor market report provided additional insight into the effects of the extensive changes to the state’s system of unemployment insurance implemented over the summer. Between November and December, the number of claimants of regular state-funded insurance increased by 4.2 percent, rising to 60,889 from 58,432. Compared to a year earlier, however, 49,942 fewer individuals received regular state-funded insurance in December (-45.1 percent).

Also in December, the state paid a (nominal) total of $59.1 million in regular state-funded unemployment insurance compensation, an amount 48.8 percent lower than the (nominal) total of $115.5 million paid in December 2012.

“The sizable drop in the state’s unemployment rate in December does not alter the fact that 2013 was yet another underwhelming year for North Carolina’s labor market,” observed Quinterno. “Job growth lagged behind the pace recorded in 2012 and was consistent with the uninspiring performance of the past four years. While the unemployment rate did fall sharply over the course of 2013, the number of employed persons barely changed, meaning that unemployment fell due to people leaving the labor market altogether rather than finding work.”

“None of 2013 data suggest that North Carolina’s labor market has turned a corner and has moved onto a more robust, more sustainable trajectory.”

23.01.2014 Policy Points No Comments

NC Unemployment Claims: Week Of 1/4/14

For the benefit week ending on January 4, 2014, North Carolinians filed some 10,656 initial claims for state unemployment insurance benefits and 76,518 claims for state-funded continuing benefits. Compared to the prior week, there were more initial claims and more continuing claims. These figures come from data released by the US Department of Labor.

Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of 7,731 initial claims were filed over the previous four weeks, along with an average of 72,891 continuing claims. Compared to the previous four-week period, the average number of initial claims was higher, and the average number of continuing claims was higher.

One year ago, the four-week average for initial claims stood at 20,210, and the four-week average of continuing claims equaled 115,748.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.86 million versus 3.79 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were six years ago.

The graph (below right) shows the changes  in unemployment insurance claims measured as a share of covered employment in North Carolina since the recession’s start in December 2007.untitled

Both new and continuing claims appear to have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably, though the numbers have been fluctuating in recent weeks. That said, the four-week average of initial claims, when measured as a share of covered employment, is close to the lowest level recorded since early 2008. The four-week average of continuing claims also has fallen toward the lowest level recorded since early 2008.

Note that the recent declines in new and continuing claims are not necessarily indicative of an improving labor market. State legislation that took effect on July 1, 2013, made major changes to insurance eligibility criteria, and the more stringent criteria eliminate claims that would have been valid prior to July 1. In time, this development also should reduce the number of continuing claims. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that eventually should lead to a reduction in the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (7,731) was 61.7 percent lower than the figure recorded one year ago (20,210), while the average number of continuing claims was 37 percent lower (72,891 versus 115,748). Given the modest rate of job growth that has occurred in North Carolina over the past year, such declines likely are products of changes to unemployment insurance laws rather than improvements in underlying economic conditions.

16.01.2014 Policy Points No Comments

NC Unemployment Claims: Week Of 12/28/13

For the benefit week ending on December 28, 2014, North Carolinians filed some 7,664 initial claims for state unemployment insurance benefits and 75,731 claims for state-funded continuing benefits. Compared to the prior week, there were more initial claims and more continuing claims. These figures come from data released by the US Department of Labor.

Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of 6,917 initial claims were filed over the previous four weeks, along with an average of 72,427 continuing claims. Compared to the previous four-week period, the average number of initial claims was lower, and the average number of continuing claims was higher.

One year ago, the four-week average for initial claims stood at 17,270, and the four-week average of continuing claims equaled 110,469.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.85 million versus 3.78 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were almost six years ago.

The graph (below right) shows the changes  in unemployment insurance claims measured as a share of covered employment in North Carolina since the recession’s start in December 2007.untitled

Both new and continuing claims appear to have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably, though the numbers have been fluctuating in recent weeks. That said, the four-week average of initial claims, when measured as a share of covered employment, is close to the lowest level recorded since early 2008. The four-week average of continuing claims also has fallen toward the lowest level recorded since early 2008.

Note that the recent declines in new and continuing claims are not necessarily indicative of an improving labor market. State legislation that took effect on July 1, 2013, made major changes to insurance eligibility criteria, and the more stringent criteria eliminate claims that would have been valid prior to July 1. In time, this development also should reduce the number of continuing claims. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that eventually should lead to a reduction in the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (6,917) was 59.9 percent lower than the figure recorded one year ago (17,270), while the average number of continuing claims was 34.4 percent lower (72,427 versus 110,469). Given the modest rate of job growth that has occurred in North Carolina over the past year, such declines likely are products of changes to unemployment insurance laws rather than improvements in underlying economic conditions.

10.01.2014 News Releases, Policy Points No Comments

US Labor Market Underwhelms In December

CHAPEL HILL, NC (January 10, 2014) – The national labor market added in December just 74,000 (+0.1 percent) more jobs than it lost. While the unemployment rate and the number of unemployed persons fell last month, much of the decline was due to people exiting the labor market rather than finding work. Last month, the size of the labor force shrank by 347,000 individuals (-0.2 percent) and now is smaller than it was one year ago.

In December, 10.4 million Americans were unemployed (6.7 percent), while 7.8 million individuals worked part time despite preferring full-time positions. Another 917,000 individuals (not seasonally adjusted) were so discouraged about their job prospects that they had stopped searching for work altogether. Those persons were part of a larger population of 2.4 million Americans who were marginally attached to the labor force.

“December was the 39th-straight month of job growth recorded in the United States,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the past year, the national economy netted an average of 182,000 jobs per month. Yet the country is still almost eight million jobs short of the number needed to replace the jobs lost since 2007 and to accommodate the subsequent growth in the size of the working-age population.”

In December, the nation’s employers added 74,000 more payroll positions than they cut (+0.1 percent). Gains occurred entirely in the private sector (+87,000), while government employers eliminated 13,000 more positions than they added, due mainly to cuts by local governments.

Furthermore, the payroll employment numbers for October and November underwent revisions; with the updates, the economy netted 441,000 jobs over those two months, not the 403,000 positions previously reported.

Within the private sector, payroll levels rose the most in the trade, transportation, and utilities sector (+69,000, with 80.1 percent of the gains occurring in the retail trade subsector), followed by the professional and business services sector (+19,000, with virtually all of the gain occurring in the administrative and waste services subsector), and the manufacturing sector (+9,000). Payroll levels in all other major sectors either declined (led by construction, -16,000) or were essentially unchanged from November.

“Since last December, the American economy has gained 2.2 million more payroll positions that it has lost,” noted Quinterno. “While the rate of growth had been accelerating in the months prior to December, the average monthly rate of job growth over the past year—some 182,000 positions per month—will not close the nation’s jobs gap anytime soon.”

Labor market conditions as measured by the household survey deteriorated in December. Last month, 10.4 million Americans (6.7 percent of the labor force) were jobless and seeking work. Both the unemployment rate and the total number of unemployed persons were lower than in the prior month. In December, the share of the population participating in the labor force fell to 62.8 percent, a rate lower than the one posted a year ago and one tied for the lowest rate logged in the past 35 years. This indicates that unemployment fell largely due to a contraction in the size of the labor force rather than an increase in employment.

Compared to a year ago, 1.4 million more Americans were working in December, and 1.9 million fewer persons were unemployed. At the same time, the share of the working-age population with a job (58.6 percent) remained at a depressed level.

Last month, the unemployment rate was higher among adult male workers than female ones (6.3 percent versus 6 percent). Unemployment rates were higher among Black (11.9 percent) and Hispanic workers (8.3 percent) than among white ones (5.9 percent). The unemployment rate among teenagers was 20.2 percent.

Moreover, 5.5 percent of all veterans were unemployed, and the rate among recent veterans (served after September 2001) was 7.3 percent. At the same time, 11.9 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).

Jobs remained comparatively hard to find in December. Last month, the underemployment rate equaled 13.1 percent, down from the 14.4 percent rate logged a year ago. Not only were 10.4 million Americans unemployed, but 7.8 million individuals worked part-time jobs despite preferring full-time work. Another 917,000 individuals (not seasonally adjusted) were so discouraged about the labor market that they had stopped searching for work.

Among unemployed workers, 37.7 percent had been jobless for at least six months (compared to 39.1 percent a year earlier), and the average spell of unemployment equaled 37.1 weeks, down from an average duration of 38 weeks in December 2012.

In December, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 51.3 percent of unemployed persons. Another 29 percent of unemployed persons were re-entrants to the labor market, while 11.5 percent were new entrants. Voluntary job leavers accounted for the remaining 8.2 percent of the total.

“The December employment report offers evidence of an underperforming labor market,” observed Quinterno. “Last month, job growth slowed markedly and joblessness increased as a result of individuals abandoning the labor market altogether. The bottom line is that the American economy is not generating enough jobs for all those who want and need work.”

“Despite the passage of six years since the onset of the ‘Great Recession,’ the United States’ jobs crisis remains far from over.”

09.01.2014 Policy Points No Comments

NC Unemployment Claims: Week Of 12/21/13

For the benefit week ending on December 21, 2014, North Carolinians filed some 4,954 initial claims for state unemployment insurance benefits and 67,204 claims for state-funded continuing benefits. Compared to the prior week, there were fewer initial claims and fewer continuing claims. These figures come from data released by the US Department of Labor.

Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of 7,176 initial claims were filed over the previous four weeks, along with an average of 72,055 continuing claims. Compared to the previous four-week period, the average number of initial claims was higher, and the average number of continuing claims was lower.

One year ago, the four-week average for initial claims stood at 13,429, and the four-week average of continuing claims equaled 104,173.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.85 million versus 3.78 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were almost six years ago.

The graph (below right) shows the changes  in unemployment insurance claims measured as a share of covered employment in North Carolina since the recession’s start in December 2007.untitled

Both new and continuing claims appear to have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably, though the numbers have been trending upward in recent weeks. That said, the four-week average of initial claims, when measured as a share of covered employment, is close to the lowest level recorded since early 2008. The four-week average of continuing claims also has fallen to near the lowest level recorded since early 2008.

Note that the recent declines in new and continuing claims are not necessarily indicative of an improving labor market. State legislation that took effect on July 1, 2013, made major changes to insurance eligibility criteria, and the more stringent criteria eliminate claims that would have been valid prior to July 1. In time, this development also should reduce the number of continuing claims. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that eventually should lead to a reduction in the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (7,176) was 46.6 percent lower than the figure recorded one year ago (13,429), while the average number of continuing claims was 30.8 percent lower (72,055 versus 104,173). Given the relative lack of improvement in labor market condition in North Carolina over the past year, such declines likely are products of changes to unemployment insurance laws rather than improvements in underlying economic conditions.