South By North Strategies, Ltd.

CHAPEL HILL, NC (July 20, 2018) – During the first half of 2018, employers in North Carolina collectively added 69,100 more payroll jobs than they cut (+1.6 percent), due almost entirely to net hiring in the private sector. The monthly household survey, meanwhile, recorded decreases in the number of unemployed North Carolinians and in the statewide unemployment rate, which fell in June to 4.2 percent, a rate last posted in late 2000.

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

“The first half of 2018 has been the best one for job growth in North Carolina since the start of the recovery,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “As has been the case for some time, the top-level labor market indicators for North Carolina point to an economy that is adding jobs and reducing unemployment. Taken in isolation, those indicators suggest that North Carolina’s labor market is performing better than it has at any point in almost 20 years.”

Between December 2017 and June 2018, North Carolina employers added 69,100 more payroll jobs than they cut (+1.6 percent), with private-sector hiring accounting for 95 percent of the net gain. Within private industry, the broad trade, transportation, warehousing, and utilities sector netted the most jobs (+13,500, +1.6 percent), followed by the educational and health services sector (+10,000, +1.7 percent) and the leisure and hospitality services sector (+8,100, +1.6 percent). No major industrial sector experienced a net decrease in payroll totals.

“During the first half of 2018, both the construction and manufacturing sectors netted more jobs than they lost, with each sector adding over 7,000 more jobs that it shed,” noted Quinterno. “Despite recent gains, the construction industry still has 14.5 percent fewer payroll positions than it did at the end of 2007, while the manufacturing sector has 10.8 percent fewer positions.”

Since North Carolina’s economic recovery began in February 2010, the state has netted an average of some 6,800 jobs per month, resulting in a cumulative gain of almost 680,000 positions (+18 percent) since the worst point of the last recession. Today, the state has 4.5 million payroll jobs, up from 3.8 million in February 2010. With that gain, North Carolina has 353,600 more jobs than it did when the recession began in December 2007 (+8.5 percent).

So far in 2018, the household survey also has offered a positive view of the state’s labor market. Since December, the unemployment rate has fallen to 4.2 percent from 4.5 percent, with the number of unemployed persons declining to 209,552. For context, the rate in February 2010 was 11.4 percent, with the number of unemployed persons totaling 525,559.

Additionally in 2018, the number of employed persons has risen by 0.9 percent, climbing to 4.8 million from 4.7 million. And the size of the labor force has increased by 0.6 percent and now totals 5 million people. Compared to when the recovery began in February 2010, some 391,500 more people (+8.5 percent) now are employed or actively seeking work.

“The 4.2 percent unemployment rate recorded in June was the lowest monthly rate recorded in North Carolina since December 2000,” observed Quinterno. “Despite similar rates of unemployment, today’s labor market arguably is not as strong as the one that existed in 2000, largely because there is scant evidence of the meaningful gains in earnings that characterized the earlier period. In short, today’s growth is not necessarily improving living standards.”

Consider private-sector earnings. After adjusting for inflation, the average private-sector wage in North Carolina in June 2018 was $24.47 per hour versus $23.49 in June 2010, a difference of $0.98 per hour. That translates into an annualized rate of growth 0.5 percent. When compared to June 2007, shortly before the “Great Recession,” the average private-sector wage in North Carolina, adjusting for inflation, is just $1.48 per hour higher than it was 11 years ago.

A similar pattern applies to average weekly earnings in the private-sector, which totaled $856 in June 2018, after adjusting for inflation, versus $806 in June 2010 and $807 in June 2007. One factor contributing to the recent increase in weekly earnings versus 2010 has been an increase in the number of hours worked each week.

“So far in 2018, North Carolina’s unemployment rate has fallen to the lowest one recorded in 18 years, while job growth has improved compared to the same point in time during prior years in the recovery,” explained Quinterno. “The improvements, however, are not translating into the kind of growth valued by workers: growth in their earnings, incomes, and standard of living.”