South By North Strategies, Ltd.

CHAPEL HILL (May 28, 2010) –  Local labor market conditions across North Carolina remained weak in April, according to preliminary data released today by the Employment Security Commission. In April, 63 counties posted double-digit unemployment rates, and 23 counties recorded unemployment rates of at least 12 percent.

“Weak conditions remained the norm in April,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “While conditions in many places have stabilized during 2010, few meaningful improvements have occurred. Most job markets are moving sideways, and there is little to celebrate.”

Since the recession’s onset in December 2007, North Carolina has shed 6.5 percent of its payroll employment base (-270,000 positions) and has seen its unadjusted unemployment rate climb from 4.7 percent to 10 percent.

Every part of the state experienced weak labor markets in April. Unemployment rates exceeded 10 percent in 63 counties, and in 23 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged from 5.8 percent in Currituck County to 15.8 percent in Scotland County.

“The recession continues to batter the state’s non-metropolitan communities,” adds Quinterno. “Last month, 11.1 percent of the non-metro labor force was unemployed, compared to 9.6 percent of the metro labor force. Since December 2007, the number of employed individuals in non-metro areas has fallen by 6.7 percent while the number of unemployed individuals has grown by 98 percent.”

Last month, unemployment rates fell in all 14 of the state’s metropolitan areas, and every metro but Rocky Mount netted jobs. Nevertheless, five metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (13.3 percent) followed by Rocky Mount (13 percent). The lowest metro unemployment rate was 7.2 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 a yearly one.”

Compared to April 2009, unemployment rates were the same or higher in 22 counties and 3 metro areas. And compared to a year ago, 68 counties and 6 metro areas had smaller labor forces. Among metros, Hickory-Morganton-Lenoir posted the largest decline in the size of its labor force (-3.3 percent), followed by Burlington (-2.1 percent). Jacksonville posted the largest gain (+6.8 percent).

“Despite some stabilization in labor market conditions, the long-term employment picture remains the same,” cautions Quinterno. “The sustained job growth needed to absorb displaced individuals and new workers simply isn’t occurring.”

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 in 2010 has been sluggish. Collectively, employment in these three major metro regions has fallen by 3.9 percent since the start of the recession. The overall April unemployment rate in the major metros equaled 9.5 percent. Of the three areas, the Research Triangle had the lowest April unemployment rate (8.1 percent), followed by the Piedmont Triad (10.5 percent) and Charlotte (11.6 percent).

“One piece of good news contained in the April 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 $8.9 billion in statewide economic activity.”