South By North Strategies, Ltd.

Around The Dial – October 28, 2011

Economic policy reports, blog postings, and media stories of interest:

• Medicaid has a long-term care problem.
• Off the Charts runs down the latest GDP report.
• Rortybomb explains why student loan debts are for life.
• The Progressive Pulse breaks down NC’s medicaid shortfall.
• Martin Wolf cautions that “all is not well.’

Local Job Markets Little Changed From Last Year

CHAPEL HILL (October 28, 2011) — Between September 2010 and September 2011, unemployment rates rose in 87 of North Carolina’s 100 counties and in 13 of the state’s 14 metropolitan areas. At the same time, 37 counties and 6 metros had labor forces in September that were smaller in size compared to one year ago. These findings come from new estimates from the Employment Security Commission.

“Unemployment rates increased across most 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. “In 58 counties, at least 10 percent of the labor force was unemployed in September, up from 37 counties a year ago. Similarly, the size of the labor force fell in 37 counties, which suggests that joblessness is more widespread than reflected in the official unemployment measure.”

Since the economy fell into recession in December 2007, North Carolina has lost, on net, 7.4 percent of its payroll employment base (-308,600 positions) and has seen its unadjusted unemployment rate climb from 4.7 percent to 10 percent. In September, the state lost 22,200 more payroll jobs than it added. Since bottoming out in February 2010, the state’s labor market has netted an average of 758 jobs per month, resulting in a cumulative gain of just 14,400 positions (+0.9 percent).

Between August and September, unemployment rates fell in all 100 counties. Unemployment rates nevertheless were at or above 10 percent in 58 counties. Individual county rates ranged from 5.1 percent in Currituck County to 17.3 percent in Scotland County. Compared to a year ago, unemployment rates were higher in 87 counties, unchanged in one county, and lower in 12 counties.

“Non-metropolitan labor markets remained particularly weak in September,” added Quinterno. “Last month, 11 percent of the non-metro labor force was unemployed, compared to 9.6 percent of the metro labor force. Over the year, the size of the rural labor force and the number of employed rural residents rose by 1.3 percent and 0.6 percent, respectively, but the number of unemployed individuals jumped by 7.5 percent. This dynamic drove the unemployment rate to 11 percent from 10.3 percent. Compared to December 2007, the non-metro labor force now is 2.9 percent smaller. Similarly, the number of employed rural residents has fallen by 8.5 percent, while the number of unemployed rural persons has nearly doubled.”

Last month, unemployment rates rose in 13 of the state’s metropolitan areas and held steady in one metro, Charlotte-Gastonia. Rocky Mount had the highest unemployment rate (13.4 percent), followed by Hickory-Morganton-Lenoir (12 percent). Durham-Chapel Hill had the lowest rate (7.7 percent), followed by Asheville (8.1 percent).

Compared to September 2010, unemployment rates were higher in 87 counties and 13 metros. Moreover, 37 counties and 6 metros had smaller labor forces. Among metros, Hickory-Morganton-Lenoir recorded the largest decline in the size of its labor force (-1.4 percent), followed by Wilmington (-0.7 percent). Fayetteville posted the largest increase (+3.5 percent), followed by Winston-Salem (+2.2 percent), and Raleigh-Cary (+1.5 percent).

In the long term, any meaningful recovery will hinge on growth in the state’s three major regions: Charlotte, the Research Triangle, and the Piedmont Triad. Yet growth remains sluggish. Collectively, employment in these three metro regions has fallen by 3.9 percent since December 2007, and the combined September unemployment rate in the three metros equaled 9.4 percent. Of the three broad regions, the Research Triangle had the lowest unemployment rate (8.3 percent), followed by the Piedmont Triad (10.2 percent), and Charlotte (11 percent).

“North Carolina’s local labor markets recorded few improvements over the past year,” said Quinterno. “Statewide job growth ground to a halt, and as a result, unemployment actually increased across much of the state. Unfortunately, little evidence suggests that the trends will change anytime soon absent policy intervention.”

“With only three months left in the year, 2011 is well on its way to being yet another lost year for North Carolina’s local job markets.”

Service Activity In The South Atlantic: October 2011

From the Federal Reserve Bank of Richmond’s latest survey of service-sector activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Service sector activity remained weak in October, according to the latest survey by the Federal Reserve Bank of Richmond. For a second month, revenues dropped at non-retail services providing establishments. Retailers’ revenues also fell, albeit more slowly than a month earlier, as big-ticket sales rose for the first time since April 2007 and the summer-long fall-off in shopper traffic nearly halted. In addition, merchants’ inventories declined in October. Looking ahead, retailers were pessimistic in their expectations for sales over the next six months, while services providers’ optimism ticked up.
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In service sector labor markets, employment flattened overall, as hiring increased at services firms but retail job losses broadened.
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Price growth moderated in October, held in check by slower retail price change. For the six months ahead, survey respondents generally expected somewhat slower price acceleration than they predicted last month.

Around The Dial – October 27, 2011

Economic policy reports, blog postings, and media stories of interest:

• The Wall St. Journal discusses the economic problems facing college grads.
• ProPublica wonders “why the SEC won’t hunt big dogs.”
• Jonathan Chait has no patience for “inequality deniers.” 
• Felix Salmon describes “Europe’s half-baked deal.”
• Simon Johnson is a fan of Tim Hoenig, the nominee for vice-chair of the FDIC.

NC Unemployment Claims: Week of 10/8/11

For the benefit week ending on October 8, 2011,  some 12,185 North Carolinians filed initial claims for state unemployment insurance benefits, and 103,854 individuals applied for state-funded continuing benefits. Compared to the prior week, there were fewer initial and more continuing claims. These figures come from data released by the U.S. 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 12,270 initial claims were filed over the previous four weeks, along with an average of 103,658 continuing claims. Compared to the previous four-week period, the average numbers of initial and continuing claims were lower.

One year ago, the four-week average for initial claims stood at 13,767 and the four-week average of continuing claims equaled 116,581.

While the number of claims has dropped over the past year so has covered employment. Last week, covered employment totaled 3.72 million, down from 3.74 million a year ago.

The graph shows the changes in unemployment insurance claims (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.  Yet continuing claims remain at an elevated level, which suggests that unemployed individuals are finding it difficult to find new positions.