South By North Strategies, Ltd.

CHAPEL HILL (May 27, 2011) – Between April 2010 and April 2011, unemployment rates fell in 93 of North Carolina’s 100 counties and in all 14 of the state’s metropolitan areas. At the same time, 89 counties and 13 metro areas had labor forces in April that were smaller than one year ago. These findings come from new estimates from the Employment Security Commission.

“North Carolina’s local labor markets are taking a winding road to recovery,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Some conditions have improved relative to the depth of the recession, but job growth remains subdued and joblessness widespread.”

Since the economy fell into recession in December 2007, North Carolina has lost, on net, 6.7 percent of its payroll employment base (-278,900 positions) and has seen its unadjusted unemployment rate climb from 4.7 percent to the current level of 9.5 percent. In April, the state gained 2,900 more payroll jobs than were lost. Over the past year, employers have added 24,100 more payroll jobs than they have cut, for an average monthly gain of just 2,008 jobs.

Unemployment rates fell across much of the state in April. Unemployment rates were at or above 10 percent in 53 counties, but compared to a year ago, unemployment rates were lower in 93 counties. Individual county rates in April ranged from 5.6 percent in Currituck County to 15.8 percent in Scotland County. Of the six counties with the lowest unemployment rates, three were in the Research Triangle area (Orange, Chatham, and Durham).

“Labor markets in non-metropolitan communities remain under pressure,” added Quinterno. “Last month, 10.5 percent of the non-metro labor force was unemployed, versus 9.1 percent of the metro labor force. While the non-metro unemployment rate declined over the course of the year, so did the size of the labor force. When compared to December 2007, the non-metro labor force is 3.7 percent smaller. The decrease in the size of the non-metro labor force accounts for the entire decline in the statewide labor force that has occurred since the onset of the recession.”

Last month, unemployment rates fell in all 14 of the state’s metropolitan areas. Rocky Mount had the highest unemployment rate (12.5 percent), followed by the Hickory-Morganton-Lenoir area (11.7 percent). Durham-Chapel Hill had the lowest rate (7 percent).

Compared to April 2010, unemployment rates were lower in 93 counties and every metro area. Yet 89 counties and 13 metro areas had smaller labor forces. Among metros, Hickory-Morganton-Lenoir (-4.7 percent) recorded the largest decline, followed by Charlotte, Rocky Mount, and Winston-Salem (tied at -2.4 percent). Raleigh-Cary posted a gain of 0.1 percent.

“Over the past year, eight of North Carolina’s metro netted jobs with Charlotte and Raleigh-Cary alone generating 78 percent of the total gains in metro areas,” observed Quinterno. “In much of the rest of the state, unfortunately, recent improvements in unemployment rates have come from workers exiting the labor force rather than finding jobs.”

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 the Piedmont Triad. Yet growth has been sluggish relative to the magnitude of the recession. Collectively, employment in these three metro regions has fallen by 4.4 percent since December 2007, and the combined April unemployment rate in the three major metros equaled 8.9 percent. Of the three areas, the Research Triangle had the lowest unemployment rate (7.7 percent), followed by the Piedmont Triad (9.7 percent), and Charlotte (10.6 percent).

“Since December 2009, the job growth that has occurred in North Carolina has been at a pace insufficient to restore full employment anytime soon, especially in non-metropolitan communities. What growth has occurred has been concentrated in a few very large metro areas that slowly are starting to diverge from the rest of the state.”