Policy Points

02.08.2013 News Releases, Policy Points No Comments

National Labor Market Sagged In July

CHAPEL HILL, NC (August 2, 2013) – The national labor market added in July 162,000 more jobs than it lost. While the unemployment rate and number of unemployed persons fell over the month, joblessness remained pervasive throughout the country. Last month, 11.5 million Americans were unemployed, while 8.2 million individuals worked part time despite preferring full-time positions. Another 988,000 individuals (not seasonally adjusted) were so discouraged about their job prospects that they had stopped searching for work altogether.

“July was the 34th-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 190,000 jobs per month, a pace that, while positive, is insufficient to drive unemployment down to pre-recessionary levels. The pace of growth slowed sharply during the past three months, falling to an average monthly net gain of 175,000 jobs, compared to an average of 224,000 jobs per month during the prior three-month period.”

In July, the nation’s employers added 162,000 more payroll positions than they cut. Gains occurred almost entirely in the private sector (+161,000), while government employers added 1,000 more positions than they eliminated. Furthermore, the payroll employment numbers for May and June underwent negative revisions; with the updates, the economy gained 364,000 jobs over those two months, not the 390,000 positions previously reported.

Within the private sector, payroll levels rose the most in the trade, transportation, and utilities sector (+63,000, with 74.3 percent of the gains occurring in the retail trade subsector), followed by the professional and business services sector (+36,000, with 58.6 percent of the gain occurring in the professional and technical services subsector) and the leisure and hospitality services sector (+23,000, with all of the gain attributable to the accommodation and food services subsector). Payroll levels fell the most in the construction and other services sectors (-6,000 and -2,000, respectively).

“Since last July, the American economy has gained 2.3 million more payroll positions that it has lost,” noted Quinterno. “The current average monthly rate of job growth—some 190,000 positions per month—is insufficient to close the nation’s sizable jobs gap anytime soon.”

Slack labor market conditions were evident in the July household survey. Last month, 11.5 million Americans (7.4 percent of the labor force) were jobless and seeking work. Both the unemployment rate and total number of unemployed persons were lower when compared to the prior month. In July, the share of the population participating in the labor force was essentially unchanged at 63.4 percent, a rate lower than the one posted a year ago. On a positive note, more Americans were working in July compared to a year earlier, and fewer persons were unemployed. At the same time, the share of the working-age population with a job remained near the lowest figure recorded during the current business cycle.

Last month, the unemployment rate was higher among adult male workers than female ones (7 percent versus 6.5 percent). Unemployment rates were higher among Black (12.6 percent) and Hispanic workers (9.4 percent) than among white ones (6.6 percent). The unemployment rate among teenagers was 23.7 percent. Moreover, 6.4 percent of all veterans were unemployed; the rate among recent veterans (served after September 2001) was 7.7 percent. At the same time, 14.7 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).

Jobs remained hard to find in July. Last month, the underemployment rate equaled 14 percent. Not only were 11.5 million Americans unemployed, but 8.2 million people held part-time jobs despite preferring full-time work; while another 988,000 individuals (not seasonally adjusted) were so discouraged about the labor market that they had stopped searching for work. Among unemployed workers, 37 percent had been jobless for at least six months, and the average spell of unemployment lasted 36.6 weeks. The leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 51.9 percent of unemployed persons. Another 28.5 percent of unemployed persons were re-entrants to the labor market, while 11 percent were new entrants. Voluntary job leavers accounted for the remaining 8.6 percent of the total.

“The July employment report provided additional evidence of a sagging labor market,” observed Quinterno. “Job growth slowed and underemployment remained elevated. Despite the drop in the unemployment rate to the lowest level recorded since November 2008, joblessness and the associated hardships remain pervasive throughout the United States.”

01.08.2013 Policy Points No Comments

NC Unemployment Claims: Week Of 7/13/13

For the benefit week ending on July 13, 2013, some 7,152 North Carolinians filed initial claims for state unemployment insurance benefits and 103,993 individuals applied 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 8,138 initial claims were filed over the previous four weeks, along with an average of 98,366 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 14,322, and the four-week average of continuing claims equaled 104,312.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.83 million versus 3.76 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were 5.5 years ago.

The graph shows the changeuntitleds in unemployment insurance claims measured as a share of covered employment in North Carolina since the recession’s start in December 2007.

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.  In fact, the four-week average of initial claims, when measured as a share of covered employment, is now at the lowest level recorded since early 2008.  Yet continuing claims remain at an elevated level, which suggests that unemployed individuals are finding it difficult to find new positions.

 

31.07.2013 Policy Points No Comments

Discussing North Carolina’s Labor Market

Last weekend, John Quinterno of South by North Strategies was a guest on the syndicated radio program News & Views with Chris Fitzsimon. Quinterno and Fitzsimon discussed trends in North Carolina’s labor market during the first half of 2013 and related policy choices taken by the state’s General Assembly.

Click below to listen to the segment (8.5 minutes).

30.07.2013 News Releases, Policy Points No Comments

Local Unemployment Rates Down Over The Year

CHAPEL HILL, NC (July 30, 2013) – Between June 2012 and June 2013, unemployment rates fell in 85 of North Carolina’s 100 countries and in 13 of the state’s 14 metropolitan areas. Over that period, however, the size of the labor force decreased in 78 counties and in 9 metro areas. These findings come from new estimates prepared by the Labor and Economic Analysis Division of the North Carolina Department of Commerce.

“Local unemployment rates fell throughout North Carolina over the year,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Unemployment rates nevertheless remained elevated, with 44 counties and 3 metro areas posting unemployment rates of at least 10 percent. In June 2008, in contrast, three counties and no metro areas logged unemployment rates of at least 10 percent.”

Compared to December 2007, which is when the national economy fell into recession, North Carolina now has 2.9 percent fewer jobs (-119,600) and has seen its unadjusted unemployment rate climb to 9.3 percent from 4.7 percent. In June, the state gained 5,700 more jobs than it added (+0.1 percent). Since bottoming out in February 2010, the state’s labor market has netted some 5,205 jobs per month, resulting in a cumulative gain of 208,200 positions (+5.4 percent).

Between May 2013 and June 2013, local unemployment rates increased in 81 of the state’s 100 counties. Individual county rates ranged from 5.8 percent in Currituck County to 16.2 percent in Scotland County. Overall, 44 counties posted unemployment rates greater than or equal to 10 percent, and 51 counties posted rates between 7 and 9.9 percent.

“Non-metropolitan labor markets continue to struggle relative to metropolitan ones,” noted Quinterno. “In June, 10.3 percent of the non-metro labor force was unemployed, compared to 8.9 percent of the metro labor force. Compared to December 2007, the non-metro labor force now has 4.9 percent fewer employed persons, while the number of unemployed individuals is 85.9 percent larger.”

Over the month, unemployment rates rose in all 14 metro areas. Rocky Mount had the highest unemployment rate (13.3 percent), followed by Hickory-Morganton-Lenoir (10.5 percent) and Fayetteville (10.4 percent). Asheville had the lowest unemployment rate (7.1 percent), followed by Durham-Chapel Hill (7.3 percent) and Raleigh-Cary (7.5 percent).

Compared to June 2012, unemployment rates in June 2013 were lower in 85 counties and 13 metro areas. Over the year, however, labor force sizes decreased in 78 counties and in 9 metros. Among metros, Rocky Mount’s labor force contracted at the greatest rate (-2.1 percent), followed by that of Hickory-Morganton-Lenoir (-1.6 percent). With those changes, metro areas now are home to 71.7 percent of the state’s labor force, with 50.2 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 remains muted. Collectively, employment in those three metro regions has risen by 2.9 percent since December 2007, and the combined June unemployment rate in the three regions equaled 8.6 percent. That was down from the 9.2 percent rate recorded one year ago yet was well above the 5.8 percent rate recorded in June 2008. Of the three broad regions, the Research Triangle had the lowest June unemployment rate (7.6 percent), followed by Charlotte and the Piedmont Triad (both 9.4 percent).

“Almost 3.5 years into a recovery in North Carolina’s labor market, unemployment rates remain elevated across the state,” said Quinterno. “The first half of 2013 was the most disappointing one for job growth since the onset of the recovery, and if current trends continue, 2013 could prove to be the worst year for labor markets in North Carolina since the recovery began.”

23.07.2013 Policy Points No Comments

Moving Beyond Inequality

Jared Bernstein weighs in regarding potential solutions to the problems of inequality and diminished economic mobility.

In my writing, I’ve identified this as the uniquely American, highly toxic combination of wealth concentration interacting with money in politics to create a vicious cycle that promotes higher inequality, less mobility, and — clearly evident in the current context — dysfunctional politics that can’t begin to do anything about either the macroeconomy or the inequality problem except make them worse.

In this regard, solutions must be both political, structural (for example, campaign finance reform) and much more demand side than strictly supply side (education being the latter — and to be clear, I agree that’s a critical part of the solution).  This is where the full employment policies I’m always going on about fit in, along with greater union power, higher minimum wages, financial market regulation, progressive taxation, and taking aim at the persistent trade deficit that has been sapping demand from our manufacturers for decades.

That’s a huge, ambitious agenda, one that goes so far beyond the realm of the possible that it may seem curious to even raise it.  But the fact is that anything useful goes beyond what’s possible right now, and I just don’t see the point of bringing a squirt gun to a forest fire.  At the very least, I’d like my fellow travelers to envision the full scope of what we’re up against.