South By North Strategies, Ltd.

CHAPEL HILL (October 23, 2009) – September saw few changes in local employment conditions across North Carolina. Last month, 64 counties posted double-digit rates of unemployment; of these, 28 had unemployment rates of at least 12 percent. These findings come from data released today by the Employment Security Commission of North Carolina.

“Local labor markets experienced few real changes in September,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Unemployment remains at recessionary levels, and local conditions are much worse than they were a year ago.”

The statewide labor market treaded water in September. Last month, employers eliminated 600 more positions than they created. Private employers slashed 13,600 positions while public-sector employers added 13,000 positions. Since the recession’s onset, North Carolina has lost, on net, 248,300 payroll jobs – an amount equivalent to 6 percent of all the jobs that existed in December 2007. Last month, 10.4 percent of the labor force was unemployed (unadjusted rate).

In September, every part of the state wrestled with weak labor markets. Unemployment rates exceeded 10 percent in 64 counties, and in 28 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged  from 5 percent in Currituck County to 16.5 percent in Scotland County.

Unemployment also remained at elevated levels in all 14 of the state’s metropolitan areas. Six metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.1 percent) followed by Rocky Mount (13.4 percent). The lowest metro unemployment rate was 7.7 percent in Durham-Chapel Hill.

“Changes in local unemployment rates must be taken with a grain of salt,” adds Quinterno. “The lack of seasonal adjustment limits the usefulness of month-to-month comparisons. Nor does the unemployment rate capture changes in the size of the labor force. Between August and September, for instance, unemployment rates fell in 76 counties, yet labor forces contracted in 64 counties. Individuals who exit the labor force are not included in the official count, so the decision of large numbers of individuals to abandon job searches can lead to an understatement of joblessness.”

The more accurate comparison is to contrast local data from September 2009 and September 2008. In every North Carolina county and metro area, unemployment rates were higher in September 2009 than they were a year ago. And compared to a year ago, half of all counties and 13 metro areas had smaller labor forces. Among metropolitan areas, Jacksonville posted the largest decline in the size of its labor force (-4 percent), followed by Asheville and Goldsboro (both smaller by 2.3 percent).

“Absent the federal recovery package, local job markets would be in much worse shape,” notes Quinterno. “Long-term recovery, however, will not occur without robust job growth, particularly private-sector growth, in North Carolina’s three largest metropolitan regions. The September data offer little evidence of such a rebound.”

In September, the unemployment rate stood at 12.2 percent in Charlotte, 10.9 percent in the Piedmont Triad, and 8.4 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 and smaller labor forces. Moreover, much of the job creation that has occurred in these areas over the past year has been in the public sector and education and health care, fields intimately tied to public financing.

“The best that can be said about local labor markets in North Carolina is that conditions appear to have stabilized, though at unacceptably high levels,” observes Quinterno. “Unfortunately, it appears as if local job markets will be treading water well into the future.”

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