South By North Strategies, Ltd.

CHAPEL HILL (September 25, 2009) – Recessionary conditions remained the norm in August for local labor markets across North Carolina. Last month, 63 counties posted double-digit rates of unemployment; of these, 34 had unemployment rates of at least 12 percent. These findings come from data released today by the Employment Security Commission.

“Despite the talk about an improving economy, labor markets across North Carolina remain extraordinarily weak,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Not only are some two-thirds of the state’s counties coping with double-digit rates of unemployment, but many are undergoing wrenching contractions in the size of their labor forces.”

August was the first month since October 2008 in which North Carolina employers created more positions than they eliminated (+7,000, driven almost entirely by government hiring). Since the recession’s onset, North Carolina has lost, on net, 253,400 payroll jobs – an amount equivalent to over 6 percent of all the jobs that existed in December 2007. Last month, 10.7 percent of the labor force was unemployed (unadjusted rate).

In August, every part of the state confronted weak labor markets. Unemployment rates exceeded 10 percent in 69 counties, and in 34 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged  from 5.1 percent in Currituck County to 16.5 percent in Scotland County.

All 14 of the state’s metropolitan areas also struggled in August. Seven metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.6 percent) followed by Rocky Mount (13.8 percent). The lowest metro unemployment rate was eight percent in Durham-Chapel Hill.

“Changes in local unemployment rates must be taken with a spoonful of salt,” adds Quinterno. “The lack of seasonal adjustment limits the usefulness of month-to-month comparisons. The unemployment rate itself also doesn’t capture changes in the size of the labor force. Because people who exit the labor force are not included in the official count, the abandonment of job searches by discouraged workers can make unemployment rates fall at the same time that overall joblessness is rising.”

The more accurate comparison is to contrast local data from August 2009, and August 2008. In every North Carolina county and metro area, unemployment rates were higher in August 2009, than they were a year ago. Also compared to a year ago, nearly half of all counties and 13 metro areas had smaller labor forces. This suggests that joblessness is more widespread than reflected in the unemployment rate.

“Improvements in the labor markets of North Carolina’s three largest metropolitan regions will be critical to any meaningful statewide economic recovery,” notes Quinterno. “There was little evidence of that occurring in August. Last month, the unemployment rate stood at 12.5 percent in Charlotte, 11.3 percent in the Piedmont Triad, and 8.6 percent in the Research Triangle. Compared to one year ago, all three major regions had unemployment rates that were at least 1.6 times greater, as well as smaller labor forces.”

“Perhaps the best that can be said about local labor markets in North Carolina is that things are not as bad as they could have been, thanks in large part to the federal recovery package,” observes Quinterno. “Unfortunately, robust economic and job growth still appear to be well over the horizon.”

Contact: John Quinterno, principal, (919) 622-2392