South By North Strategies, Ltd.

CHAPEL HILL (April 19, 2011) – In March, employers in North Carolina added 13,900 more payroll positions than they eliminated, according to data released today by the Employment Security Commission. The monthly gain was the third-largest one recorded since the state’s labor market bottomed out in late 2009. Nevertheless, joblessness remains a serious problem. Over the past year, total payroll employment in the state has risen by just 0.9 percent.

“March marked the third consecutive month of job growth in North Carolina,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Unfortunately, the rate of growth remains insufficient to close the jobs gap anytime soon. The state’s labor market is far from healthy.”

Last month, North Carolina employers added 13,900 more payroll positions than they cut. Net gains occurred in the private (+12,700) and public (+1,200) sectors. Among private industries, professional and business services netted the most positions (+6,000), followed by trade, transportation, and utilities (+2,200), and leisure and hospitality services (+1,800). The gains were offset by drops in other services (-1,600), manufacturing (-600), and information (-300).

Additionally, a revision to the February data found that the state gained 1,500 more payroll positions than first thought (+18,900 versus an original estimate of +17,400). With that revision, North Carolina has lost, on net, 277,100 positions, or 6.6 percent of its payroll employment base, since December 2007.

“During the first quarter of 2011, North Carolina’s labor market gained 37,800 more positions than it lost,” noted Quinterno. “The quarter was the first one since 2007 to see job growth in each month of a quarter. Unfortunately, that growth was too modest to offset the extraordinary job losses recorded during the recession.”

Between March 2010 and March 2011, North Carolina netted 36,500 jobs (+0.9 percent). All of the growth (+45,600 positions) occurred in the private sector, while the public sector shed 9,100 positions. In terms of individual industries, professional and business services grew the most in absolute and relative terms (+25,300, +5.3 percent). Construction shed the most jobs in absolute and relative terms (-6,200, -3.5 percent). In the public sector, net job loss was driven by reductions at the state (-4,300, -2.2 percent) and local (-5,000, -1.1 percent) levels.

The household data for March, meanwhile, contained some positive signs. Last month, the total number of employed individuals increased by 13,402 (+0.3 percent), while the number of unemployed individuals fell by 1,949 (-0.1 percent). The size of the workforce also grew by 11,453 individuals (+0.3 percent). And, both the labor force participation rate and employment to population ratio improved in March.

Over the year, the number of unemployed North Carolinians fell by 80,359 (-15.6 percent). Unfortunately, much of this decline was attributable to individuals exiting the labor force. Between March 2010 and March 2011, the size of the labor force contracted by 83,397 individuals (-1.6 percent). Over the year, the unemployment rate fell sharply, dropping to 9.7 percent from 11.3 percent.

“While welcome, the positive job growth recorded over the past year has done little to close the state’s job gap or drive down unemployment to acceptable levels,” observed Quinterno. “The contraction in the size of the labor force remains a real concern. The share of the adult population with a job is lower now than it was in December 2007. In March 2011, 55.8 percent of working-age North Carolinians had jobs, compared to 62.4 percent in December 2007.”

“The positive job growth recorded during the first quarter of 2011 should not obscure the fact that North Carolina’s labor market remains in terrible shape by any objective measure,” added Quinterno. “Since the labor market bottomed out in December 2009, the total number of jobs in the state has increased by just 1.1 percent. At that pace, it will take years to regain the ground lost during the recession.”