South By North Strategies, Ltd.

Local Employment in NC

September saw few changes in local employment conditions across North Carolina. Last month, 64 counties posted double-digit rates of unemployment; of these, 28 had unemployment rates of at least 12 percent.

In September, every part of the state wrestled with weak labor markets. Unemployment rates exceeded 10 percent in 64 counties, and in 28 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged  from 5 percent in Currituck County to 16.5 percent in Scotland County.

Unemployment also remained at elevated levels in all 14 of the state’s metropolitan areas. Six metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.1 percent) followed by Rocky Mount (13.4 percent). The lowest metro unemployment rate was 7.7 percent in Durham-Chapel Hill.

Click to read South by North Strategies’ analysis of the latest employment report.

Local Job Markets Tread Water

CHAPEL HILL (October 23, 2009) – September saw few changes in local employment conditions across North Carolina. Last month, 64 counties posted double-digit rates of unemployment; of these, 28 had unemployment rates of at least 12 percent. These findings come from data released today by the Employment Security Commission of North Carolina.

“Local labor markets experienced few real changes in September,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Unemployment remains at recessionary levels, and local conditions are much worse than they were a year ago.”

The statewide labor market treaded water in September. Last month, employers eliminated 600 more positions than they created. Private employers slashed 13,600 positions while public-sector employers added 13,000 positions. Since the recession’s onset, North Carolina has lost, on net, 248,300 payroll jobs – an amount equivalent to 6 percent of all the jobs that existed in December 2007. Last month, 10.4 percent of the labor force was unemployed (unadjusted rate).

In September, every part of the state wrestled with weak labor markets. Unemployment rates exceeded 10 percent in 64 counties, and in 28 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged  from 5 percent in Currituck County to 16.5 percent in Scotland County.

Unemployment also remained at elevated levels in all 14 of the state’s metropolitan areas. Six metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.1 percent) followed by Rocky Mount (13.4 percent). The lowest metro unemployment rate was 7.7 percent in Durham-Chapel Hill.

“Changes in local unemployment rates must be taken with a grain of salt,” adds Quinterno. “The lack of seasonal adjustment limits the usefulness of month-to-month comparisons. Nor does the unemployment rate capture changes in the size of the labor force. Between August and September, for instance, unemployment rates fell in 76 counties, yet labor forces contracted in 64 counties. Individuals who exit the labor force are not included in the official count, so the decision of large numbers of individuals to abandon job searches can lead to an understatement of joblessness.”

The more accurate comparison is to contrast local data from September 2009 and September 2008. In every North Carolina county and metro area, unemployment rates were higher in September 2009 than they were a year ago. And compared to a year ago, half of all counties and 13 metro areas had smaller labor forces. Among metropolitan areas, Jacksonville posted the largest decline in the size of its labor force (-4 percent), followed by Asheville and Goldsboro (both smaller by 2.3 percent).

“Absent the federal recovery package, local job markets would be in much worse shape,” notes Quinterno. “Long-term recovery, however, will not occur without robust job growth, particularly private-sector growth, in North Carolina’s three largest metropolitan regions. The September data offer little evidence of such a rebound.”

In September, the unemployment rate stood at 12.2 percent in Charlotte, 10.9 percent in the Piedmont Triad, and 8.4 percent in the Research Triangle. Compared to one year ago, all three major regions had unemployment rates that were at least 1.6 times greater and smaller labor forces. Moreover, much of the job creation that has occurred in these areas over the past year has been in the public sector and education and health care, fields intimately tied to public financing.

“The best that can be said about local labor markets in North Carolina is that conditions appear to have stabilized, though at unacceptably high levels,” observes Quinterno. “Unfortunately, it appears as if local job markets will be treading water well into the future.”

Contact: John Quinterno, Principal, (919) 622-2392

Triangle Business Journal Spotlights New Research

In its October 23rd edition, Triangle Business Journal featured South by North Strategies’ regular analysis of weekly unemployment claims in North Carolina. The article, entitled Signs Emerge that State Jobless Numbers May Have Hit “Plateau,” looks at what the leveling off of weekly unemployment claims data mean for the state’s economy.

The article was inspired by a recent post at Policy Points, South by North Strategies’ weekday blog about economic and social policy. Every Thursday, the blog features a short analysis of new unemployment claims data.

Housing Market: September Starts/Permits

From the latest issue of the Center for Economic and Policy Research’s Housing Market Monitor:

After rebounding from the extraordinarily low levels of last winter, housing construction seems to have stabilized over the last three months. Starts were at a 590,000 annual rate in October, the same level as June and also the average for the last two months. Starts of single-family homes have increased slightly over this period, rising by 4.8 percent from their June level. Starts in buildings with 5 or more units fell by 22.8 percent.
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On a more encouraging note, it appears that the pace of foreclosures may finally be slowing. According to MDA Data Quick, notices of default in California were down by 10 percent compared with the second quarter, although they were up 18.5 percent from the third quarter of 2008. Actual foreclosures were down by 37 percent from their year ago level, although they have been rising modestly in the last two quarters. These figures present a mixed picture on mortgage modification plans. The modification plans probably have slowed the rate of foreclosure slightly in California, one of the hardest hit states in the country, but foreclosures are still occurring at a rate of close to 200,000 a year.
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It is likely that house prices may see renewed downward pressure with fewer first-time buyers in the market. Also, many sellers who had delayed putting their homes on the market may no longer have the ability to delay selling further. And there continues to be a large supply of foreclosed homes.

Around the Dial – Oct. 22

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

• The Economix documents soaring college costs.
• Naked Capitalism wrestles with the problem of “too big to fail.”
• The Economic Policy Institute analyzes flawed tax incentives for retirement savings.
• The National Journal asks if the American dream is still alive.
• The Charlotte Observer revisits the Wells Fargo-Wachovia merger.