South By North Strategies, Ltd.

CHAPEL HILL (January 24, 2011) – North Carolina ended 2010 essentially with no more payroll jobs than it had at the beginning of the year. According to data released today by the Employment Security Commission, North Carolina gained 2,300 payroll positions in December, but that gain did little to close the state’s large jobs gap. Over the course of 2010, net payroll employment grew by just 0.3 percent.

“2010 delivered very little in the way of job growth for North Carolina,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “In several respects, labor market conditions actually worsened during the year.”

Last month, North Carolina employers added 2,300 more payroll positions than they cut. Net gains occurred in both the private (+1,700) and public (+600) sectors. Among private industries, professional and business services netted the most positions (+3,600), followed by manufacturing (+1,400) and trade, transportation and utilities (+1,300). The gains were offset by declines in construction (-3,900) and leisure and hospitality services (-2,300).

Additionally, a revision to the November data decreased the net job loss first reported for that month. Instead of losing 12,500 positions, North Carolina actually shed 5,800 positions. With that revision, North Carolina has lost, on net, 272,800 positions – 6.5 percent of its payroll employment base – since December 2007.

“While positive, the job gains posted in December and the upward revision to the November report have not altered the fundamental jobs picture in North Carolina,” notes Quinterno. “Meaningful job growth simply is not occurring, and in many ways, conditions actually deteriorated during the second half of the year.”

Since bottoming out in September 2009, North Carolina’s labor market has recorded little growth. Total payroll employment is just 0.6 percent greater than it was at the recession’s lowest point.

Between December 2009 and December 2010, North Carolina gained 10,400 jobs (0.3 percent). Almost all of the growth (10,000 positions) occurred in the private sector. In terms of individual industries, professional and business services grew the most in absolute and relative terms (+20,800, +4.5 percent). Construction shed the most jobs in absolute and relative terms (-11,500, -6.5 percent). In the public sector, net job loss resulted entirely from reductions among local governments.

The household data for December, meanwhile, were mixed. Last month, the labor force grew by 0.1 percent as 2,264 more individuals found work or actively looked for work. On the other hand, the total number of employed individuals fell, and the number of unemployed individuals rose to 439,167. These dynamics pushed the statewide unemployment rate to 9.8 percent. Furthermore, a variety of other data points suggest that joblessness and the attendant hardships are much more widespread than reflected in the official unemployment measure.

“Perhaps the most worrisome trend observed in 2010 was the decline in the size of the labor force,” observes Quinterno. “Compared to a year ago, there are 52,626 fewer people working or actively seeking work. The size of the state’s labor force now is at the lowest level recorded since July 2006.”

“The December employment offers no evidence that a recovery in the job market is underway in North Carolina,’ added Quinterno. “2010 was in effect a lost year for North Carolina’s job market and the people who depend on it for their livelihoods.”