South By North Strategies, Ltd.

CHAPEL HILL (August 28, 2009) – Despite some small fluctuations in individual county unemployment rates, local labor markets across North Carolina remained extraordinarily weak in July. Last month, 69 counties posted double-digit rates of unemployment; of these, 39 had unemployment rates of at least 12 percent. These findings come from data released today by the Employment Security Commission.

“The basic employment story in communities across North Carolina remained unchanged in July,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “While conditions are not deteriorating as sharply as they were earlier in the year, they are not improving either.”

July was the 10th consecutive month in which North Carolina employers eliminated more jobs than they created (-26,400). Since the start of the recession, North Carolina has lost, on net, 258,000 payroll jobs – an amount equivalent to over 6 percent of all the jobs that existed in December 2007. Furthermore, 11.1 percent of the labor force was unemployed (unadjusted rate) in July.

Last month, every part of the state faced weak labor markets. Unemployment rates exceeded 10 percent in 69 counties, and in 39 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged  from 5.5 percent in Currituck and Hyde counties to 17.1 percent in Scotland County.

All 14 of the state’s metropolitan areas also struggled in July. Last month, eight metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (15.1 percent) followed by Rocky Mount (14.3 percent). The lowest metropolitan unemployment rate was 8.3 percent in Durham-Chapel Hill.

“For any meaningful statewide labor market recovery to occur, job growth will need to resume in North Carolina’s three major metropolitan areas,” notes Quinterno. “There was little evidence of this happening in July. Last month, unemployment rates stood at 13 percent in Charlotte, 11.6 percent in the Piedmont Triad, and 9.1 percent in the Research Triangle.”

Some observes may look to drops in county unemployment rates between June and July as a sign that conditions are improving, but this comparison is a misleading one. Monthly local unemployment rates are not adjusted for seasonal effects, which can be quite pronounced during the summer, especially in tourist communities. The more accurate comparison is to contrast local data from July 2009 and July 2008.

“Local unemployment rates soared between July 2008 and July 2009,” explains Quinterno. “Last month, 82 counties had unemployment rates that were at least 1.5 times greater than the ones recorded a year ago. The same dynamic occurred in 10 of the state’s 14 metropolitan areas.”

“The July employment report suggests that the pace of job loss in North Carolina has slowed, thanks in part to the federal recovery package, but the overall trajectory remains a downward one,” says Quinterno.

“Overall economic conditions remain quite weak, and unless the demand for goods and services increases, North Carolina communities will struggle with high levels of joblessness well into the future.”

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