South By North Strategies, Ltd.

Progress Of A Kind

CHAPEL HILL (April 27, 2011) – Between March 2010 and March 2011, unemployment rates fell in 98 of North Carolina’s 100 counties and in all 14 of the state’s metropolitan areas. At the same time, 81 counties and 13 metro areas had labor forces in March that were smaller than they were one year ago. These findings come from estimates released today by the Employment Security Commission.

“While unemployment rates fell across North Carolina over the past year, many local job markets remain deeply scarred by the recession,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Joblessness remains widespread, and despite some recent improvements, job growth is not occurring at the pace needed to accommodate all the North Carolinians who need and want work.”

Since the economy fell into recession in December 2007, North Carolina has lost, on net, 6.6 percent of its payroll employment base (-277,100 positions) and has seen its unadjusted unemployment rate climb from 4.7 percent to the current level of 9.7 percent. In March, the state gained 13,900 more payroll jobs than were lost. Over the past year, North Carolina employers have added 36,500 more payroll jobs than they have cut.

Unemployment rates fell across much of the state in March. Unemployment rates were at or above 10 percent in 61 counties, but compared to a year ago, unemployment rates were lower in 98 counties. Individual county rates in March ranged from 6.1 percent in Orange County to 16.4 percent in Graham County. Of the five counties with the lowest unemployment rates, four were in the Research Triangle area (Orange, Chatham, Durham, and Wake counties).

“Labor markets in non-metropolitan communities remain particularly weak,” added Quinterno. “Last month, 10.8 percent of the non-metro labor force was unemployed, compared to 9.3 percent of the metro labor force. While the non-metro unemployment rate declined over the course of the year, so did the size of the labor force. When compared to December 2007, the non-metro labor force is 3.5 percent smaller.”

Last month, unemployment rates fell in all 14 of the state’s metropolitan areas. Rocky Mount had the highest unemployment rate (12.5 percent), followed by the Hickory-Morganton-Lenoir area (11.9 percent). Durham-Chapel Hill had the lowest rate (7.1 percent).

Compared to March 2010, unemployment rates were lower in 98 counties and every metro area. Yet 81 counties and 13 metro areas had smaller labor forces. Among metros, Hickory-Morganton-Lenoir (-4.8 percent) recorded the largest decline, followed by Winston-Salem (-2.5 percent) and Rocky Mount (-2.4 percent). Raleigh-Cary posted the only gain (+0.2 percent).

“While seven of North Carolina’s metro areas—led by Raleigh-Cary, Burlington, and Wilmington—recorded modest rates of employment growth over the past year, overall growth levels were insufficient to cure joblessness,” cautioned Quinterno. “Much of the recent improvement in unemployment rates is due to the exiting of workers from the labor market, even though such individuals are effectively unemployed.”

In the long term, any meaningful recovery will be driven by growth in the state’s three major metro regions: Charlotte, the Research Triangle, and the Piedmont Triad. Yet growth has been sluggish. Collectively, employment in these three metro regions has fallen by 4.4 percent since December 2007. The combined March unemployment rate in the three major metros equaled 9 percent. Of the three areas, the Research Triangle had the lowest unemployment rate (7.7 percent), followed by the Piedmont Triad (10 percent), and Charlotte (10.7 percent).

“Since December 2009, the month when then the state’s labor market bottomed out, local unemployment rates have fallen across North Carolina, but during the same time, the total size of the state’s labor force fell as well,” noted Quinterno. “While some meaningful progress has been made over the last year, local labor markets remain far from healthy.”

Economists Being Catty

New York magazine’s profile of Paul Krugman contains ample examples of economists being catty.

I ask [former U.S. Treasury Secretary Lawrence]Summers what he thinks is Krugman’s underlying complaint with the Obama administration. “Paul may be the smartest and most creative applied economic thinker of this era,” he says, “but there is some element of him that is like the guy in the bleachers who always demands the fake kick, the triple-reverse, the long bomb, or the big trade.”
…
The two economists have known each other since the late seventies, when they were both graduate students in Cambridge, and there were moments in conversation with Krugman that I began to suspect he viewed Summers as a one-man control group for his study of himself. They each share a high assessment of the other’s intellect (“Larry’s extremely smart—ask him and he’ll tell you,” Krugman says). Krugman’s sense of humor is built upon self-deprecation, and sometimes Summers’s sense of humor is built upon deprecating Krugman, too. In the early eighties, when the two worked together in the Reagan administration, Krugman realized that Summers had a talent for effectiveness—winning meetings, organizing subordinates, convincing economic novices of his point of view—that he himself could not hope to match. Summers became the insider and Krugman the outsider.

Around The Dial – 4/26/11

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

• Paul Krugman goes for a hike.
• Economix wonders about the link between inequality and trust.
• Simon Johnson finds economic policymakers too arrogant for their own good.
• The New Republic thinks there is a “law school bubble.”

Sad, So Sad

Rolling Stone points out the use of political contributions to influence state investigations into banking abuses.

A hilarious report has come out courtesy of the National Institute of Money in State Politics, showing that Iowa Attorney General Tom Miller – who is coordinating the investigation into the banks’ improper mortgage dealings – increased his campaign contributions from the finance sector this year by a factor of 88! … That is 88 times as much as they gave him not over last year, but over the previous decade.
…
This is about as perfect an example of how American politics works as you’ll ever see. This foreclosure issue is a monstrous story that is somehow escaping national headlines; essentially, all of the largest banks in the country have been engaged in an ongoing fraud and tax evasion scheme that among other things has resulted in many hundreds of billions in investor losses, and hundreds of thousands of improper foreclosures. Last week, the 14 largest mortgage lenders a group that includes bailout all-stars like Citigroup, Bank of America and Wells Fargo, managed to negotiate a settlement with the federal government that will mandate some financial relief to homeowners who have been victims of improper foreclosure practices. It’s unclear yet exactly what damages and fines will be involved in the federal settlement, or how many homeowners will be affected. But certainly there are some who believe the federal settlement was a political end-run around the states’ efforts to extract their own deal from the banks.

Around The Dial – 4/25/11

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

• The New York Times reports on the debate over QE2.
• Calculated Risk previews this week’s Federal Reserve meeting.
• John Judis wonders about the Obama administration’s economic message.
• Harry Payne opines on changes to NC’s worker compensation system.
• TaxVox muses about the language of tax expenditures.