South By North Strategies, Ltd.

CHAPEL HILL, NC (February 5, 2014) – Between December 2012 and December 2013, 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 42 counties and 6 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 92 counties and in 14 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 statewide rate falling by 2.8 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.”

“We can’t lose sight of the fact that local unemployment rates across North Carolina remain elevated,” added Quinterno. “In December, 99 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 1.7 percent fewer payroll jobs (-71,200). In December, the state added 11,100 more jobs than it lost (+0.3 percent). Since bottoming out in February 2010, the state’s labor market has netted some 5,578 jobs per month, resulting in a cumulative gain of 256,600 positions (+6.7 percent). At that rate, all else equal, it would take until early 2015 for the state to have as many payroll jobs as it did at the end of 2007.

Between November 2013 and December 2013, local unemployment rates decreased in 86 of the state’s 100 counties, rose in 11 counties, and held constant in 3 counties. Individual county rates in December ranged from 4.1 percent in Orange County to 12.6 percent in Scotland County. Overall, 5 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 still are struggling relative to metropolitan ones,” noted Quinterno. “In December, 7.5 percent of the non-metro labor force was unemployed, compared to 6.3 percent of the metro labor force. Compared to December 2007, the non-metro labor force now has 5.5 percent fewer employed persons, while the number of unemployed individuals is 30.6 percent larger. Over that time, the size of the rural labor force has fallen by 3.5 percent.”

Between November and December, unemployment rates fell in all 14 of the state’s metro areas. Rocky Mount had the highest unemployment rate (9.4 percent), followed by Fayetteville (7.8 percent) and Hickory-Morganton-Lenoir (7.2 percent). Durham-Chapel Hill had the lowest unemployment rate (4.9 percent), followed by Asheville (5 percent) and Raleigh-Cary (5.2 percent).

Compared to December 2012, unemployment rates in December 2013 were lower in all 100 counties and all 14 metro areas. Over the year, however, labor force sizes decreased in 92 counties and in 14 metros. In fact, the statewide labor force was 2.3 percent smaller (-111,164 individuals) in December 2013 than it was in December 2012.

Among metros, Rocky Mount’s labor force contracted at the greatest rate (-5.3 percent), followed by Hickory-Morganton-Lenoir (-4.2 percent) and Burlington (-3.3 percent). With those changes, metro areas now are home to 72 percent of the state’s labor force, with 50.8 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 muted. Collectively, employment in the three metro regions has risen by 4.2 percent since December 2007, and the combined unemployment rate in December totaled 6 percent. Of the three broad regions, the Research Triangle had the lowest December unemployment rate (5.2 percent), followed by the Piedmont Triad (6.6 percent) and Charlotte (6.7 percent).

The local employment report for December also provides 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 33,157, down from the 62,681 initial claims filed a year earlier (-47.3 percent).

Mecklenburg County was home to greatest number of regular initial claims (3,079), followed by Wake (2,066), Guilford (1,889), Forsyth (1,029), and Cumberland (1,024) counties.

In December 2013, North Carolinians received a (nominal) total of $62.2 million in regular state-funded and federal unemployment insurance compensation, down from the (nominal) $237.3 million received in December 2012. This sharp decline (-73.8 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 December 2012 and December 2013, the amount of federal unemployment insurance benefits paid to North Carolinians fell by 97.5 percent, dropping to a (nominal) total of $3.1 million from a (nominal) total of $121.8 million.

“Despite recent declines in local unemployment rates, 2013 proved to be another weak year for local labor markets across North Carolina,” said Quinterno. “The fundamental problem facing the state is the same one that has troubled it for the past four years: a sluggish recovery that is not generating enough employment opportunities for all those who want and need them.”