South By North Strategies, Ltd.

CHAPEL HILL, NC (August 17, 2018) – In July, employers in North Carolina collectively added 10,400 more payroll jobs than they cut (+0.2 percent), with gains occurring in both the private and public sectors. The monthly household survey, meanwhile, recorded decreases in the number of unemployed North Carolinians and in the statewide unemployment rate, which fell to 4.1 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.

“So far, 2018 is shaping up to be the best year for payroll 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. “North Carolina’s top-level labor market indicators point to an economy that is creating jobs and reducing unemployment. Viewed in isolation, these indicators paint a picture of a labor market that is performing better than at any time in almost 20 years.”

Between December 2017 and July 2018, North Carolina employers added 79,700 more payroll jobs than they cut (+1.8 percent), with private-sector hiring accounting for 88 percent of the net gain. Within private industry, the broad trade, transportation, warehousing, and utilities sector netted the most jobs (+14,900, +1.8 percent), followed by the professional and business services sector (+11,300, +1.8 percent) and the educational and health services sector (+11,100, +1.8 percent). No major industrial sector experienced a net decrease in payroll totals.

“In 2018, the construction and manufacturing sectors both have netted more jobs than they have lost, with each sector netting more than 8,000 jobs,” noted Quinterno. “Despite those gains, the construction industry still has 13 percent fewer payroll positions than it did at the end of 2007, while the manufacturing sector has 11 percent fewer positions.”

Since North Carolina’s economic recovery began in February 2010, the state has netted an average of 6,800 jobs per month, resulting in a cumulative gain of some 690,000 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 364,200 more jobs than it did when the recession began in December 2007 (+8.7 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 4.1 percent from 4.5 percent, with the number of unemployed persons declining to 203,407. For context, the rate in February 2010 was 11.4 percent, with the number of unemployed persons totaling 525,559.

Also in 2018, the number of employed persons has risen by 1.2 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 exceeds 5 million people. Compared to when the recovery began in February 2010, some 398,000 more people (+8.6 percent) now are employed or actively seeking work.

“The 4.1 percent unemployment rate recorded in July was the lowest monthly rate logged in North Carolina since November 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 generally is not improving living standards.”

Consider private-sector earnings. After adjusting for inflation, the average private-sector wage in North Carolina in July 2018 was $24.79 per hour versus $23.65 in July 2010, a real difference of $1.14 per hour. That translates into an annualized rate of growth 0.6 percent. When compared to July 2007, shortly before the “Great Recession,” the average private-sector wage in North Carolina, adjusting for inflation, is just $1.69 per hour higher than it was 11 years ago.

A similar pattern applies to average weekly earnings in the private-sector, which totaled $868 in July 2018, after adjusting for inflation, versus $807 in July 2010 and $813 in July 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.

“North Carolina’s unemployment rate fell in July to the lowest one recorded in 18 years, while job growth has improved compared to earlier in the recovery,” explained Quinterno. “The improvements still are not translating into the kinds of growth valued by workers: growth in earnings, incomes, and standards of living.”