South By North Strategies, Ltd.

CHAPEL HILL (April 23, 2010) –  Local labor market conditions across North Carolina remained weak in March, based on preliminary data released today by the Employment Security Commission. In March 75 counties posted double-digit unemployment rates, and 43 counties recorded unemployment rates of at least 12 percent.

“Weak labor markets remained the norm in March,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Labor market conditions have stabilized since last summer, and some job creation has occurred, but jobs are not being generated at levels needed to cut down joblessness.”

Since the recession’s onset in December 2007, North Carolina has shed 6.7 percent of its payroll employment base (-280,200 positions) and has seen its unadjusted unemployment rate climb from 4.7 percent to 10.9 percent.

Every part of the state experienced weak labor markets. Unemployment rates exceeded 10 percent in 75 counties, and in 43 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged from 6.4 percent in Orange County to 17.2 percent in Graham County.

“The labor-market recession continues to batter the state’s non-metropolitan communities,” adds Quinterno. “Last month,12 percent of the non-metro labor force was unemployed, compared to 10.4 percent of the metro labor force. Since December 2007, the number of employed individuals in non-metro areas has fallen by 6.8 percent.”

Last month, unemployment rates fell in all 14 of the state’s metropolitan areas, and every metro netted jobs. Nevertheless, eight metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.5 percent) followed by Rocky Mount (13.5 percent). The lowest metro unemployment rate was 7.8 percent in Durham-Chapel Hill.

“Because of the lack of seasonal adjustments, monthly fluctuations in local unemployment rates must be interpreted cautiously, especially since unemployment normally rises at the start of the year before dipping in the spring,” cautions Quinterno. “A better comparison is to contrast yearly data.”

Compared to March 2009, unemployment rates were the same or higher in 44 counties and 9 metro areas. And compared to a year ago, 44 counties and 2 metro areas had smaller labor forces. Among metros, Hickory-Morganton-Lenoir posted the largest decline in the size of its labor force (-2.4 percent), followed by Burlington (-0.9 percent). Jacksonville posted the largest gain (+6.3 percent).

“Despite some stabilization in labor market conditions, the long-term employment picture remains the same,” cautions Quinterno. “The sustained job growth needed to bring down unemployment simply isn’t there yet.”

In the long term, any meaningful recovery will be driven by growth in the state’s three major metro regions: Charlotte, the Research Triangle, and Piedmont Triad. Yet job growth so far in 2010 has been sluggish. Collectively, employment in these three major metro regions has fallen by 4.7 percent since the start of the recession. The overall March unemployment rate in the major metros equaled 10.3 percent. Of the three areas, the Research Triangle had the lowest February unemployment rate (8.7 percent), followed by the Piedmont Triad (11.3 percent) and Charlotte (12.5 percent).

“One piece of good news contained in the March report is evidence of the powerful role that unemployment insurance has played in blunting the recession,” observes Quinterno. “Over the last 12 months, the Employment Security Commission paid out $5.4 billion in regular state payments, emergency federal benefits, and additional federal compensation. These payments not only helped households coping with a job loss, but they also generated an estimated $8.8 billion in statewide economic activity.”