South By North Strategies, Ltd.

CHAPEL HILL, NC (April 19, 2013) – The total number of payroll jobs in North Carolina essentially was unchanged in March (-300, +/- 0 percent). While the statewide unemployment rate (seasonally adjusted) fell by 0.2 percentage points, the decline was intertwined with a 0.5 percent contraction in the size of the labor force. In fact, fewer people held jobs in March than in February. These findings come from new data released by the Labor and Economic Analysis Division of the NC Department of Commerce.

“Calling the March employment report ‘lackluster’ would be an overly charitable description,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Overall employment levels in both the private and public sectors were unchanged, while a number of major labor force indicators moved in the wrong direction. The share of the working-age population participating in the labor force, for one, fell to a level last seen in late 2011.”

In March, North Carolina employers cut 300 more jobs than they added (+/- 0 percent). Private-sector payrolls netted 600 positions (+/- 0 percent), while public-sector payrolls shed 900 jobs (+/- 0 percent). Within the private sector, the professional and business services sector netted the most jobs (+4,200, +0.8 percent), with 71.4 percent of the gain originating in the administrative and waste management services subsector. The information industry added, on net, 1,300 positions (+1.8 percent), followed by the education and health services sector (+1,100, +0.2 percent). Meanwhile, the manufacturing sector shed the most positions (-3,700, -0.8 percent), with 72.9 percent of the losses related to the manufacture of non-durable goods. The trade, transportation, and utilities sector lost 2,200 positions (-0.3 percent), with all of the losses occurring in the retail trade subsector. The construction sector also shed -1,800 jobs (-1.1 percent).

A revision to the February payroll data found that the state gained fewer jobs than first estimated (+2,500 versus +3,300). With that revision, North Carolina now has, on net, 119,400 fewer payroll positions (-2.9 percent) than it did in December 2007. Since bottoming out in February 2010, the state has netted an average of 5,632 payroll jobs per month, resulting in a cumulative gain of 208,400 positions (+5.4 percent).

“North Carolina has experienced little net payroll growth so far in 2013,” noted Quinterno. “During the first quarter of 2013, the state netted 16,300 payroll jobs, for a total increase of 0.4 percent. In comparison, state payrolls grew, on net, by 30,900 positions, or 0.8 percent, during the first quarter of 2012.”

The household data for March also pointed to the existence of an under-performing labor market. Last month, the number of unemployed North Carolinians fell (-11,619, -2.6 percent), but so did the number of employed persons (-10,954, -0.3 percent). The drop in the unemployment rate to 9.2 percent from 9.4 percent in February therefore was intertwined with a contraction in the size of the labor force (-22,573, -0.5 percent). In March, the share of the working-age population participating in the labor force (62.8 percent) fell for the second consecutive month and reached a level last seen in late 2011.

Compared to a year ago, 42,669 more North Carolinians held jobs in March (+1 percent), while 7,127 fewer persons were unemployed (-1.6 percent). Viewed in light of the increase in the size of the labor force that also occurred (+35,542, +0.8 percent), the drop in the unemployment rate that took place over the year was a positive improvement. Meanwhile, the labor force participation rate fell by 0.2 percentage points over the year, while the employment to population ration held constant at 57.1 percent; both measures, however, remain at depressed levels.

Such improvements in the labor market are unimpressive when viewed in relation to the severity of the employment problems facing the state. North Carolina’s unemployment rate has equaled or exceeded 9 percent in every month since January 2009 and has ranged as high as 11.4 percent. Over the past 15 months, the rate has fluctuated between 9.2 percent and 9.6 percent. Moreover, compared to December 2007, which was when the “Great Recession” began, the statewide unemployment rate is 4.2 percentage points higher, and the number of unemployed North Carolinians is 90.3 percent larger.

“The March employment report is consistent with a labor market that is stable but going nowhere fast,” observed Quinterno. “When combined with reports from earlier in the year, it is clear that 2013 is not so far shaping up to be the year in which the state’s labor market turns a corner.”