05.02.2014 News Releases, Policy Points

US Labor Market Takes A Wild Ride In April

CHAPEL HILL, NC (May 2, 2014) – In April, the national labor market added 288,000 more jobs than it lost (+2.1 percent) due mainly to gains in the private sector. This net gain was the largest one logged in any month since January 2012 and was the third-largest monthly gain recorded since October 2010. Yet the household data painted a more negative picture of the labor market, with the number of employed persons actually declining in April.

“April was the 43rd-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 197,000 jobs per month, but it still remains 7.1 million jobs short of the total needed to replace the jobs lost since 2007 and to meet subsequent population growth.”

In April, the nation’s employers added 288,000 more payroll jobs than they cut (+2.1 percent). Some 95 percent of the gain came from the private sector (+273,000), while public employers added 15,000 more positions than they cut. Within the private sector, payroll levels rose the most in the professional business services sector (+75,000, with 51.5 percent of the gain occurring in the administrative and waste services subsector), followed by the trade, transportation, and utilities sector (+59,000, with 58.5 percent of the gain occurring in the retail trade subsector) and the education and health services sector (+40,000, with 69.8 percent of the gain occurring in the health care and the social assistance subsector). Payroll levels in the other major industry groups rose or held steady.

Additionally, the payroll employment numbers for February and March underwent revisions; with the updates, the economy netted 425,000 jobs over those two months, not the 389,000 positions previously reported. With those changes, the average pace of monthly job growth in the United States recorded over the past year rose to 197,000 from 194,000.

“While the United States has experienced steady job growth for the past 3.5 years, 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 anytime soon.”

Data from the household survey, meanwhile, offered a more negative picture of the state of the United States’ labor market. In April, the number of Americans who reported having jobs actually decreased by 73,000 persons (-0.1 percent); put differently, fewer people reported having jobs in April than in March. And the overall size of the labor force declined by 806,000 persons between March and April. Compared to March, fewer Americans participated in the labor force in April, and the share of working-age people with a job was unchanged.

In April, 9.8 million Americans were unemployed (6.3 percent), while 7.5 million individuals worked part time despite preferring full-time positions. Another 783,000 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 million more Americans were working in April, and 1.9 million fewer persons were unemployed. At the same time, the share of the working-age population with a job (58.9 percent) remained at a depressed level, while the share of the population that was participating in the labor force actually decreased over the year, falling to 62.8 percent from 63.4 percent.

Last month, the unemployment rate was higher among adult male workers than female ones (5.9 percent versus 5.7 percent). Unemployment rates were higher among Black (11.6 percent) and Hispanic workers (7.3 percent) than among white ones (5.3 percent). The unemployment rate among teenagers was 19.1 percent.

Additionally, 5.6 percent of all veterans were unemployed in April, and the rate among recent veterans (served after September 2001) was 6.8 percent. At the same time, 12.5 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).

Jobs remained comparatively hard to find in April. Last month, the underemployment rate equaled 12.3 percent, down from the 13.9 percent rate logged a year ago. Among unemployed workers, 35.3 percent had been jobless for at least six months (compared to 37.4 percent a year earlier), and the average spell of unemployment equaled 35.1 weeks, down from 36.6 weeks in April 2013.

In April, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 54.1 percent of unemployed persons. Another 27.1 percent of unemployed persons were re-entrants to the labor market, while 10.8 percent were new entrants. Voluntary job leavers accounted for the remaining 8.1 percent of the total.

“The April employment report painted a mixed portrait of the American labor market,” observed Quinterno. “The payroll survey contained positive findings, but the data in the household survey were much more negative. While the economy is netting jobs at a somewhat more robust pace than first thought, it is not adding enough jobs, rapidly enough to provide employment opportunities to all those who want and need work. Even with the recent drops in the unemployment rate, the United States’ jobs crisis remains far from over.”

05.01.2014 Policy Points

NC Unemployment Claims: Week Of 4/12/14

For the benefit week ending on April 12, 2014, North Carolinians filed some 4,378 initial claims for state unemployment insurance benefits and 56,689 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 4,978 initial claims were filed over the previous four weeks, along with an average of 59,378 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 10,975, and the four-week average of continuing claims equaled 92,992.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.88 million versus 3.81 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 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 (4,978) was 54.6 percent lower than the figure recorded one year ago (10,975), while the average number of continuing claims was 36.1 percent lower (59,378 versus 92,992). 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.

04.29.2014 News Releases, Policy Points

Local Unemployment Rates Fluctuate In March

CHAPEL HILL, NC (April 29, 2014) – Between March 2013 and March 2014, unemployment rates fell in all 100 of North Carolina’s counties and in all 14 of the state’s metropolitan areas. Over the same period, however, the number of people who reported having jobs actually decreased in 30 counties and 2 metro areas. That suggests that drops in unemployment were intertwined with the exiting of people from the labor force; in fact, the size of the labor force decreased in in 71 counties and in 8 metro areas over the year.

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, with the unadjusted statewide rate falling by 1.8 percentage points,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Many counties and metros now are experiencing some of the lowest unemployment rates recorded since the onset of the ‘Great Recession’ in December 2007.”

“One must not forget the fact that local unemployment rates across North Carolina remain elevated,” added Quinterno. “In March, 96 counties and 14 metro areas posted unemployment rates greater than those logged six years ago.”

Compared to December 2007, which is when the national economy fell into recession, North Carolina now has 1.6 percent fewer payroll jobs (-67,700). In March, the state added 19,400 more jobs than it lost (+0.5 percent). Since bottoming out in February 2010, the state’s labor market has netted some 5,329 jobs per month, resulting in a cumulative gain of 261,100 positions (+6.8 percent). At that rate, all else equal, it would take until April 2015 for the state to have as many payroll jobs as it did at the end of 2007.

Between February 2014 and March 2014, local unemployment rates decreased in 59 of the state’s 100 counties, rose in 23 counties, and held constant in 18 counties. Individual county rates in March ranged from 4.6 percent in Chatham County to 12.7 percent in Graham County. Overall, 6 counties posted unemployment rates greater than or equal to 10 percent, and 58 counties posted rates between 6.7 and 9.9 percent.

“Non-metropolitan labor markets continue to struggle relative to metropolitan ones,” noted Quinterno. “In March, 7.5 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 5.4 percent fewer employed persons, while the number of unemployed individuals is 30.1 percent larger. Over that time, the size of the non-metro labor force has fallen by 3.4 percent.”

Between February and March, unemployment rates fell in 5 of the state’s metro areas, rose in 3 metro areas, and held steady in 6 metro areas. Rocky Mount had the highest unemployment rate (9.4 percent), followed by Fayetteville (7.5 percent) and Hickory-Morganton-Lenoir (7 percent). Durham-Chapel Hill had the lowest unemployment rate (5.1 percent), followed by Asheville and Raleigh-Cary (both 5.2 percent).

Compared to March 2013, unemployment rates in March 2014 were lower in all 100 counties and all 14 metro areas. Over the year, however, labor force sizes decreased in 71 counties and in 8 metros. In fact, the statewide labor force (seasonally adjusted) was 1 percent smaller (-49,426 individuals) in March 2014 than it was in March 2013.

Among metros, Rocky Mount’s labor force contracted at the greatest rate (-2.8 percent) over the course of the year, followed by Greensboro-High Point (-1.8 percent) and Jacksonville and Hickory-Morganton-Lenoir (both -1.7 percent). With those changes, metro areas now are home to 72.2 percent of the state’s labor force, with 51 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 subdued. Collectively, employment in the three metro regions has risen by 5.7 percent since December 2007, and the combined unemployment rate in March totaled 6 percent. Of the three broad regions, the Research Triangle had the lowest December unemployment rate (5.3 percent), followed by Charlotte (6.4 percent) and the Piedmont Triad (6.6 percent).

The local employment report for March also provided insights into the effects of the extensive changes to the state’s system of unemployment insurance implemented over the summer. Last month, the number of regular unemployment insurance initial claims filed in North Carolina totaled 21,557, down from the 44,155 initial claims filed a year earlier (-51.2 percent).

Mecklenburg County was home to greatest number of regular initial claims (2,595), followed by Wake (1,664), Guilford (1,099), Forsyth (777), and Cumberland (765) counties.

In March 2014, North Carolinians received a (nominal) total of $51.4 million in regular state-funded and federal unemployment insurance compensation, down from the (nominal) $209.7 million received in March 2013. This sharp decline (-75.5 percent) is attributable to a mix of factors, such as drops in the number of insurance claims resulting from economic improvements and legal changes to eligibility criteria.

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 December. Between March 2013 and March 2014, the amount of federal unemployment insurance benefits paid to North Carolinians fell by 98.1 percent, dropping to a (nominal) total of $2 million from a (nominal) total of $104.2 million.

“Even with the recent declines in local unemployment rates, labor market conditions in communities across North Carolina still remain far away from their pre-recessionary states,” said Quinterno. “The March data showed little deviation from the fundamental problem that has troubled the state for the last four years: a sluggish recovery that is not generating enough employment opportunities, rapidly enough for all those who want and need them.”

04.24.2014 Policy Points

NC Unemployment Claims: Week Of 4/5/14

For the benefit week ending on April 5, 2014, North Carolinians filed some 5,537 initial claims for state unemployment insurance benefits and 57,805 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 5,128 initial claims were filed over the previous four weeks, along with an average of 61,025 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 10,809, and the four-week average of continuing claims equaled 94,701.

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 now 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. 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 (5,128) was 52.6 percent lower than the figure recorded one year ago (10,809), while the average number of continuing claims was 35.6 percent lower (61,025 versus 94,701). 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.

04.21.2014 News Releases, Policy Points

NC Labor Market Delivers More Of The Same

CHAPEL HILL, NC (April 21, 2014) – In March, employers in North Carolina added 19,400 more payroll positions than they cut (+0.5 percent), due entirely to growth in the private sector. The monthly household survey, meanwhile, recorded a drop in unemployment, with the statewide unemployment rate falling to 6.3 percent. Nevertheless, North Carolina still has fewer payroll jobs, more unemployed residents, and a higher unemployment rate than it did 6.25 years ago.

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

“The March employment report is another mixed report similar to those of the last several months,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “In March, North Carolina experienced a relatively modest change in the total number of payroll jobs in the state. At the same time, both the number of unemployed persons and the unemployment rate fell.”

Between February 2014 and March 2014, North Carolina employers added 19,400 more jobs than they cut (+0.5 percent). Private-sector payrolls netted 19,900 positions (+0.6 percent), but public-sector payrolls shed, on net, 500 jobs (-0.3 percent). Within private industry, the professional and business services sector netted the most jobs (+7,600, + 1.4 percent), followed by the trade, transportation, and utilities sector (+5,500 jobs, +0.7 percent) and the education and health services sector (+3,500, +0.6 percent). Last month, payroll levels in almost every major private-sector industry group either increased or held constant.

A revision to the February 2014 payroll data found that the state lost 3,950 more jobs that month than first estimated (-11,300 versus -7,349). With that revision, North Carolina now has, on net, 67,700 fewer payroll positions (-1.6 percent) than it did in December 2007. Since bottoming out in February 2010, the state has netted an average of 5,329 payroll jobs per month, resulting in a cumulative gain of 261,100 positions (+6.8 percent). At that rate, holding all else equal, it would take until April 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 quickened over the past year,” explained Quinterno. “Between March 2013 and March 2014, the total number of payroll jobs in North Carolina grew by 1.6 percent, a rate similar to those seen in prior years. Between March 2012 and March 2013, the total of number payroll jobs in North Carolina also rose by 1.6 percent, while between March 2011 and March 2012, the rate of growth was 1.7 percent. From March 2010 to March 2011, the rate of growth was 1.5 percent. No matter how one cuts the data, North Carolina has experienced the same slow rate of job growth for the last four years.”

The household data recorded in March offered a somewhat positive view of the state’s labor market. Last month, the statewide unemployment rate fell by 0.1 percentage points to 6.3 percent, which was the lowest monthly rate recorded since the middle of 2008. Additionally, 10,277 more North Carolinians had jobs in March (+0.2 percent) than in February, and 2,412 fewer persons were unemployed (-0.1 percent). And over the month, the size of the state’s labor force essentially held steady at 4.7 million.

While the changes in household data recorded between February and March seemed positive, the data for changes over the past year were less so. Between March 2013 and March 2014, the number of unemployed North Carolina’s fell by 105,637 persons, but 46.8 percent of the decline was attributable to people who left the labor force entirely. If those 49,426 persons were added back to the labor force and considered unemployed, the statewide unemployment rate in March would have equaled 7.3 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 6.8 percent.

Declines in the statewide labor force participation rate provide additional evidence of a labor market that is not growing rapidly enough to accommodate all those who want and need work. In March, the labor force participation rate held steady at the revised February 2014 figure of 61 percent, which is the lowest monthly figure recorded at any point since 1976. Moreover, the labor force participation rate has fallen steadily since December 2012, when the rate equaled 62.7 percent.

Although another important measure of labor utilization, the employment-to-population ratio, has ticked up since December 2013, the March 2014 ratio of 57.1 percent was identical to the one logged in March 2013 and just 0.8 percentage points above the 38-year low of 56.3 percent posted in the summer of 2011.

The March 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 February and March, the number of claimants of regular state-funded insurance fell by 6.8 percent, dropping to 52,666 from 56,514. Compared to a year earlier, 50,372 fewer individuals received regular state-funded insurance in March (-48.9 percent).

Also in March, the state paid a (nominal) total of $49.4 million in regular state-funded unemployment insurance compensation, an amount 53.1 percent lower than the (nominal) total of $105.5 million paid in March 2013.

“Despite recent declines in the statewide unemployment rate, labor market conditions in North Carolina remain underwhelming. Look beyond the important yet limited measure of the unemployment rate, and one will see labor market dynamics essentially no different from the sluggish ones that have characterized the past four years.”