07.18.2014 News Releases, Policy Points

North Carolina’s Slow Recovery Continues

CHAPEL HILL, NC (July 18, 2014) – In June, employers in North Carolina shed 5,800 more payroll positions than they added (-0.1 percent), due almost entirely to reductions in the payrolls of local governments. The monthly household survey, meanwhile, recorded no change in the unemployment rate (6.4 percent), even though the number of employed persons fell over the month. With those developments, North Carolina has 1.2 percent fewer payroll jobs, 30.9 more unemployed residents, and a higher unemployment rate (+1.4 percentage points) than it did 6.5 years ago.

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

“The June employment report is indicative of a state labor market experiencing a painfully slow recovery,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Last month, North Carolina lost more jobs than it gained, and the state experienced declines in both the size of the labor force and the number of employed residents. While conditions in the state are better in some ways than they were a year ago, they still have not returned to their pre-recessionary levels.”

Between May 2014 and June 2014, North Carolina employers cut 5,800 more jobs than they added (-0.1 percent). Private-sector payrolls netted 7,500 positions (+0.2 percent), but public-sector payrolls shed, on net, 13,300 jobs (-1.9 percent), owing primarily to reductions by local governments. Within private industry, the professional and business services sector netted the most jobs (+3,700, with almost of the gains occurring in administrative and waste management subsector), followed by the financial activities sector (+3,400, +1.6 percent) and the trade, transportation, warehousing, and utilities sector (+1,000, with almost all the gain originating in the retail trade subsector). Meanwhile, the information sector shed 500 more jobs than it added (-0.7 percent). All other major industrial sectors experienced little change in payroll size.

A revision to the May 2014 payroll data found that the state gained 3,000 more jobs that month than first estimated (+8,700 versus +5,700). With the revision, North Carolina has, on net, 48,500 fewer payroll positions (-1.2 percent) than it did in December 2007. Since bottoming out in February 2010, the state has netted an average of 5,400 payroll jobs per month, resulting in a cumulative gain of 280,300 positions (+7.3 percent). At that rate, holding 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.

“While positive, the pace of payroll growth in North Carolina has not changed radically over the past year,” noted Quinterno. “Between June 2013 and June 2014, the total number of payroll jobs in North Carolina grew by 1.8 percent, a rate similar to that seen in prior years. Between June 2012 and June 2013, the total of number payroll jobs in North Carolina rose by 1.7 percent, while between June 2011 and June 2012, the rate of growth was 1.5 percent. In effect, North Carolina has logged the same slow rate of job growth for several years in a row.”

The household data recorded in June contained negative news about the state’s labor market. Last month, the statewide unemployment rate held steady at 6.4 percent, even though the number of employed persons fell by 8,577 (-0.2 percent). However, a decline in the size of the statewide labor force (-10,719 persons, -0.2 percent) blunted the impact of the drop in employment. Remember, however, that the monthly changes in the June data should be interpreted cautiously due to the seasonal dynamics often present at the start of summer.

While the changes in household data recorded between May and June appeared negative, the data for changes over the past year were more mixed. Between June 2013 and June 2014, the number of unemployed North Carolinians fell by 89,007 persons (-22.9 percent), but 13.4 percent of the decline was attributable to people who left the labor force entirely. If those 11,953 persons were added back to the labor force and considered unemployed, the statewide unemployment rate in June would have equaled 6.6 percent. Even if 50 percent of those individuals were added back to the labor force and considered unemployed, the statewide unemployment rate would have equaled 6.5 percent.

Year-over-year declines in the statewide labor force participation rate provide additional evidence of an underperforming labor market. In June 2014, the share of working-age North Carolinians participating in the labor market equaled 61.1 percent, which was lower than the 62 percent figure recorded a year ago. The June labor force participation rate was only slightly above the lowest monthly figure (61 percent) recorded at any time since January 1976.

In contrast, another important measure of labor utilization, the employment-to-population ratio, rose over the year, climbing to 57.2 percent from 56.8 percent. Nevertheless, the current share of working-age North Carolinians with a job is just 0.9 percentage points above the 38-year low of 56.3 percent posted in 2011.

The June labor market report provided additional insight into the effects of the extensive changes to the state’s system of unemployment insurance implemented last summer. Between May and June, the number of claimants of regular state-funded insurance fell by 4.8 percent, dropping to 40,347 from 42,382. Compared to a year earlier, 50,631 fewer individuals received regular state-funded insurance in June (-55.7 percent).

Also in June, the state paid a (nominal) total of $36.8 million in regular state-funded unemployment insurance compensation, an amount 60.9 percent lower than the (nominal) total of $94.2 million paid in June 2013.

“Despite some improvements in North Carolina’s labor market over the year, most of the improvements have been marginal ones,” added Quinterno. A consideration of indicators other than the important-yet-limited unemployment rate reveals a labor market that is adding jobs too slowly to overcome the consequences of the last recession anytime soon.”

07.17.2014 Policy Points

NC Unemployment Claims: Week Of 6/28/14

For the benefit week ending on June 28, 2014, North Carolinians filed some 4,824 initial claims for state unemployment insurance benefits and 50,775 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 5,363 initial claims were filed over the previous four weeks, along with an average of 51,192 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 9,712, and the four-week average of continuing claims equaled 85,006.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.89 million versus 3.82 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 at 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. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that should reduce the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (4,824) was 50.3 percent lower than the figure recorded one year ago (9,712), while the average number of continuing claims was 40.3 percent lower (50,775 versus 85,006). 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.

07.10.2014 Policy Points

NC Unemployment Claims: Week Of 6/21/14

For the benefit week ending on June 21, 2014, North Carolinians filed some 5,356 initial claims for state unemployment insurance benefits and 51,416 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 5,573 initial claims were filed over the previous four weeks, along with an average of 51,593 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 10,787, and the four-week average of continuing claims equaled 86,573.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.89 million versus 3.82 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 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 should reduce the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (5,573) was 48.3 percent lower than the figure recorded one year ago (10,787), while the average number of continuing claims was 40.4 percent lower (51,593 versus 86,573). 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.

07.03.2014 Policy Points

NC Unemployment Claims: Week Of 6/14/14

For the benefit week ending on June 14, 2014, North Carolinians filed some 5,785 initial claims for state unemployment insurance benefits and 51,160 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 5,390 initial claims were filed over the previous four weeks, along with an average of 52,006 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 10,938, and the four-week average of continuing claims equaled 89,960.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.89 million versus 3.82 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 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 should reduce the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (5,785) was 47.1 percent lower than the figure recorded one year ago (10,938), while the average number of continuing claims was 43.1 percent lower (51,160 versus 89,960). 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.

07.03.2014 News Releases, Policy Points

US Labor Market Improves In June

CHAPEL HILL, NC (July 3, 2014) – In June, the national labor market added 288,000 more jobs than it lost due primarily to gains in the private sector. At the same time, the national unemployment rate dropped to 6.1 percent. The drop in unemployment was a positive development attributable to more people reporting themselves as being employed. Nevertheless, unemployment in the United States remains elevated, while other important measures of labor utilization remain near depressed levels.

“June was the 45th-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 208,000 jobs per month, a pace that, while positive, still is insufficient to replace all of the jobs lost since 2007 and to accommodate subsequent population growth.”

In June, the nation’s employers added 288,000 more payroll jobs than they cut. Some 91 percent of the gain originated in the private sector (+262,000), while public employers added 26,000 more positions than they cut. Within the private sector, payroll levels rose the most in the trade, transportation, and utilities sector (+72,000, with 55.8 percent of the gain originating in the retail trade subsector), followed by the professional business services sector (+67,000, with 51.3 percent of the gain occurring in the administrative and waste services subsector), the leisure and hospitality services sector (+39,000, with 89.7 percent of the gain originating in the accommodation and food service sector), and the education and health services sector (+38,000). Payroll levels in the other major industry groups either rose in June or essentially held steady.

Additionally, the payroll employment numbers for April and May underwent revisions; with the updates, the economy netted 528,000 jobs over those two months, not the 499,000 positions previously reported. With those changes, the average pace of monthly job growth in the United States recorded over the past year rose to 208,000 from 198,000.

“The United States has experienced steady job growth for the past 3.75 years, but the pace of growth has been modest relative to the severity of the job losses caused by the last recession,” noted Quinterno. “The current average monthly rate of job growth is insufficient to close the nation’s jobs gap—a gap now estimated at 6.7 million jobs—anytime soon.”

Data from the household survey offered additional positive news about the health of the United States’ labor market. In June, the number of Americans who reported having jobs rose by 407,000 (+0.3 percent); put differently, more people reported having jobs in June than in May. At the same time, the overall size of the labor force rose by 81,000 persons (+0.1 percent) between May and June. Meanwhile, the share of working-age Americans participating in the labor force held steady in June, while the share of working-age Americans with a job ticked up over the month.

In June, 9.5 million Americans were unemployed (6.1 percent), while 7.5 million individuals worked part time despite preferring full-time positions. Another 676,000 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 2.1 million Americans who were marginally attached to the labor force.

Compared to a year ago, 2.1 million more Americans were working in June, and 2.3 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 decreased over the year, falling to 62.8 percent from 63.5 percent.

Last month, the unemployment rate was higher among adult male workers than female ones (5.7 percent versus 5.3 percent). Unemployment rates were higher among Black (10.7 percent) and Hispanic workers (7.8 percent) than among white ones (5.3 percent). The unemployment rate among teenagers was 21 percent.

Additionally, 5.4 percent of all veterans were unemployed in June, and the rate among recent veterans (served after September 2001) was 7 percent. At the same time, 12.9 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).

Jobs remained comparatively hard to find in June. Last month, the underemployment rate equaled 12.1 percent, down from the 14.2 percent rate logged a year ago. Among unemployed workers, 32.8 percent had been jobless for at least six months, as opposed to 36.9 percent a year earlier, and the average spell of unemployment equaled 33.5 weeks, down from 35.7 weeks in May 2013.

In June, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 51.2 percent of unemployed persons. Another 28.5 percent of unemployed persons were re-entrants to the labor market, while 11.2 percent were new entrants. Voluntary job leavers accounted for the remaining 9 percent of the total.

“The June employment report painted a portrait of a national job market that is showing improvements but remains far from healed,” observed Quinterno. “The magnitude of the problems stemming from the ‘Great Recession’ combined with the painfully prolonged recovery have obscured just how unusual current conditions are and have created a distorted picture of what a robust job market would look like.”