Policy Points

21.08.2014 Policy Points No Comments

NC Unemployment Claims: Week Of 8/2/14

For the benefit week ending on August 2, 2014, North Carolinians filed some 5,130 initial claims for state unemployment insurance benefits and 52,751 claims for state-funded continuing benefits. Compared to the prior week, there were more 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 5,134 initial claims were filed over the previous four weeks, along with an average of 52,593 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 lower.

One year ago, the four-week average for initial claims stood at 7,081, and the four-week average of continuing claims equaled 96,874.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.9 million versus 3.8 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were more than 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 have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably. The four-week average of initial claims, when measured as a share of covered employment, is at the lowest level recorded since early 2008, while the four-week average of continuing claims  is near the lowest level recorded since early 2008.

Note that the recent year-over-year 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, 2013. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that reduces the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (5,134) was 27.5 percent lower than the figure recorded one year ago (7,081), while the average number of continuing claims was 45.7 percent lower (52,593 versus 96,874). 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.

14.08.2014 Policy Points No Comments

NC Unemployment Claims: Week Of 7/26/14

For the benefit week ending on July 26, 2014, North Carolinians filed some 5,091 initial claims for state unemployment insurance benefits and 52,810 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 5,315 initial claims were filed over the previous four weeks, along with an average of 52,744 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 7,374, and the four-week average of continuing claims equaled 106,593.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.89 million versus 3.84 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were more than 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 have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably. The four-week average of initial claims, when measured as a share of covered employment, is at the lowest level recorded since early 2008, while the four-week average of continuing claims also is at the lowest level recorded since early 2008.

Note that the recent year-over-year 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, 2013. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that reduces the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (5,315) was 27.9 percent lower than the figure recorded one year ago (7,374), while the average number of continuing claims was 50.5 percent lower (52,744 versus 106,593). 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.

07.08.2014 Policy Points No Comments

NC Unemployment Claims: Week Of 7/19/14

For the benefit week ending on July 19, 2014, North Carolinians filed some 4,756 initial claims for state unemployment insurance benefits and 52,430 claims for state-funded continuing benefits. Compared to the prior week, there were fewer 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 5,249 initial claims were filed over the previous four weeks, along with an average of 52,235 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 7,468, and the four-week average of continuing claims equaled 104,107.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.89 million versus 3.83 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were more than 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 have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably. The four-week average of initial claims, when measured as a share of covered employment, is near the lowest level recorded since early 2008, while the four-week average of continuing claims also is near the lowest level recorded since early 2008.

Note that the recent year-over-year 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. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that reduces the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (5,249) was 29.7 percent lower than the figure recorded one year ago (7,468), while the average number of continuing claims was 49.8 percent lower (52,235 versus 104,107). 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.

01.08.2014 News Releases, Policy Points No Comments

US Labor Market Cooled In July

CHAPEL HILL, NC (August 1, 2014) – In July, the national labor market added 209,000 more jobs than it lost due primarily to gains in the private sector. At the same time, the unemployment rate ticked up by 0.1 percentage points to 6.2 percent. While employment increased and the labor force grew, the changes were modest. Overall labor market conditions in the United States consequently remain far from healthy.

“July was the 46th-straight month in which the United States experienced net job growth,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the year, the economy has netted an average of 214,000 jobs per month, a pace that remains inadequate to repair the damage inflicted on the national labor market in the wake of the last recession.”

In July, the nation’s employers added 209,000 more payroll jobs than they cut. Some 95 percent of the gain originated in the private sector (+198,000), while public employers added 11,000 more positions than they cut. Within the private sector, payroll levels increased the most in the professional and business services sector (+47,000, with 34.3 percent of the gain occurring in the administrative and waste services subsector), followed by the trade, transportation, and utilities sector (+39,000, with 68.5 percent of the gain originating in the retail trade subsector) and the manufacturing sector (+28,000, with all of the increase originating in the manufacture of durable goods). Payroll levels in the other major industry groups either rose in July or essentially held steady.

Additionally, the payroll employment numbers for May and June underwent revisions; with the updates, the economy netted 527,000 jobs over those two months, not the 512,000 positions previously reported. With those changes, the average pace of monthly job growth in the United States recorded over the past year rose to 214,000.

“The United States has experienced steady job growth for almost four years, but the pace of growth has been modest relative to the severity of the job losses caused by the last recession,” noted Quinterno. “While the country now has more payroll jobs than it did in December 2007, the current average monthly rate of job growth is insufficient to close the jobs gap caused by the recession—a gap now estimated at 6.6 million jobs—anytime soon.”

Data from the household survey offered mixed news about the health of the United States’ labor market. In July, the number of Americans who reported having jobs rose by 131,000 (+0.1 percent); put differently, more people reported having jobs in July than in June. At the same time, the overall size of the labor force rose by 329,000 persons (+0.2 percent) between June and July. Meanwhile, the share of working-age Americans participating in the labor force rose in July, while the share of working-age Americans with jobs held steady.

In July, 9.7 million Americans were unemployed (6.2 percent), while 7.5 million individuals worked part time despite preferring full-time positions. Another 741,000 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 2.2 million Americans who were marginally attached to the labor force.

Compared to a year ago, 2.1 million more Americans were working in July, and 1.7 million fewer persons were unemployed. At the same time, the share of the working-age population with a job (59 percent) remained at a depressed level, while the share of the population that was participating in the labor force fell to 62.9 percent from 63.4 percent.

Last month, the unemployment rate was identical for adult male and female workers (5.7 percent). Unemployment rates were higher among Black (11.4 percent) and Hispanic workers (7.8 percent) than among white ones (5.3 percent). The unemployment rate among teenagers was 20.2 percent.

Additionally, 6 percent of all veterans were unemployed in July, and the rate among recent veterans (served after September 2001) was 9.2 percent. At the same time, 12.1 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).

Jobs remained comparatively hard to find in July. Last month, the underemployment rate equaled 12.2 percent, down from the 13.9 percent rate logged a year ago. Among unemployed workers, 32.9 percent had been jobless for at least six months, as opposed to 37.2 percent a year earlier, and the average spell of unemployment equaled 32.4 weeks, down from 36.7 weeks in July 2013.

In July, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 50.3 percent of unemployed persons. Another 29.5 percent of unemployed persons were re-entrants to the labor market, while 11.3 percent were new entrants. Voluntary job leavers accounted for the remaining 8.9 percent of the total.

“The July employment report offered a portrait of a national job market that has improved yet is far from healed,” observed Quinterno. “The magnitude of the problems caused by the last recession coupled with an excruciatingly slow recovery have obscured how unusual current conditions are and have created a distorted picture of what a healthy job market looks like.”

30.07.2014 News Releases, Policy Points No Comments

Local Unemployment Rates Down Over The Year

CHAPEL HILL, NC (July 30, 2014)  Between June 2013 and June 2014, unemployment rates once again fell in all of North Carolina’s 100 counties and in all 14 of the state’s metropolitan areas. Over the same period, labor force sizes shrank in 90 counties and in 12 metro areas. 

These findings come from new estimates released by the Labor and Economic Analysis Division of the North Carolina Department of Commerce. 

“Local unemployment rates fell across all of North Carolina over the past year,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Although many local labor markets currently have some of the lowest unemployment rates since late 2007, unemployment remains a serious problem. In fact, 61 counties and 9 metro areas have unemployment rates greater than those posted in June 2008.” 

Compared to December 2007, which is when the national economy fell into recession, North Carolina now has 1.2 percent fewer payroll jobs (-48,500). In June, the state lost 5,800 more jobs than it lost (-0.1 percent). Since bottoming out in February 2010, the state’s labor market has netted some 5,390 jobs per month, resulting in a cumulative gain of 280,300 positions (+7.3 percent). At that rate, all else equal, it would take until early 2015 for the state to have as many payroll jobs as it did at the end of 2007.

Between May and June 2014, local unemployment rates decreased in 81 of the state’s 100 counties, increased in 10 counties, and held constant in 9 counties. Individual county rates in June ranged from 4.2 percent in Currituck County to 12.1 percent in Scotland County. Overall, 3 counties posted unemployment rates greater than or equal to 10 percent, and 54 counties posted rates between 6.6 and 9.9 percent. (Because seasonal fluctuations in labor markets are pronounced in the summer, month-to-month changes provide limited insight into trends.)

“Non-metropolitan labor markets continue to lag behind metropolitan ones,” noted Quinterno. “In June, 7.1 percent of the non-metro labor force was unemployed, compared to 6.2 percent of the metro labor force. Compared to December 2007, the non-metro labor force now has 3.7 percent fewer employed persons, while the number of unemployed individuals is 24.2 percent larger. Over that time, the size of the non-metro labor force has fallen by 2.2 percent.” 

Between May and June, unemployment rates dropped in 13 of the state’s 14 metro areas. Rocky Mount had the highest unemployment rate (9.6 percent), followed by Fayetteville (7.5 percent) and Greenville and Hickory-Morganton-Lenoir (both 6.9 percent). Asheville had the lowest unemployment rate (4.9 percent), followed by Durham-Chapel Hill (5.1 percent) and Raleigh-Cary (5.2 percent). 

Compared to June 2013, unemployment rates in June 2014 were lower in all 100 counties and all 14 metro areas. Over the year, however, labor force sizes decreased in 90 counties and in 12 metros. In fact, the statewide labor force (seasonally adjusted) was 0.3 percent smaller (-11,953 individuals) in June 2014 than it was in June 2013. 

Among metros, Rocky Mount’s labor force contracted at the fastest rate (-3.4 percent) over the course of the year, followed by Fayetteville (-3.1 percent) and Hickory-Morganton-Lenoir (-2.9 percent). With those changes, metro areas now are home to 72 percent of the state’s labor force, with 50.8 percent of the labor force residing in the Triangle, Triad, and Charlotte metros. 

In the long term, improvements in overall labor market conditions depend on growth in the Charlotte, Research Triangle, and Piedmont Triad regions. Yet growth in these metros, although improved in recent months, remains subdued. Collectively, employment in the three metro regions has risen by 5.9 percent since December 2007, and the combined unemployment rate in June totaled 6 percent (compared to 5.8 percent in June 2008). Of the three broad regions, the Research Triangle had the lowest June unemployment rate (5.3 percent), followed by Charlotte (6.4 percent) and the Piedmont Triad (6.5 percent).  

The local employment report for June also provided insights into the effects of the extensive changes to the state’s system of unemployment insurance implemented last summer. Last month, the number of regular unemployment insurance initial claims filed in North Carolina totaled 24,209, down from the 44,734 initial claims filed a year earlier (-45.9 percent). 

Mecklenburg County was home to greatest number of regular initial claims (2,961), followed by Wake (2,103), Guilford (1,522), Cumberland (860), and Forsyth (822) counties. 

In June 2014, North Carolinians received a (nominal) total of $38 million in regular state-funded and federal unemployment insurance compensation, down from the (nominal) $189.4 million received in June 2013. This sharp decline (-79.9 percent) is attributable to a mix of factors, such as drops in the number of insurance claims resulting from economic improvements and legal changes that restricted eligibility for insurance compensation. 

Additionally, the state’s decision to exit the federal Emergency Unemployment Compensation (EUC) program reduced the amount of federal unemployment insurance compensation flowing into the state in June. Between June 2013 and June 2014, the amount of federal unemployment insurance benefits paid to North Carolinians fell by 98.8 percent, dropping to a (nominal) total of $1.1 million from a (nominal) total of $95.2 million. (Note that the US Congress allowed the EUC program to expire at the start of 2014.)

“Despite recent improvements in some important indicators, labor market conditions in communities across North Carolina still have not returned to their pre-recessionary states,” said Quinterno. “The June data showed little deviation from the basic pattern that has characterized the state’s labor market for the past four years; namely, a painfully slow recovery.”