South By North Strategies, Ltd.

CHAPEL HILL (October 21, 2011) – North Carolina’s job market stumbled through September, ending the month with 22,200 fewer payroll jobs than with which it started. After accounting for those losses, the state had just 0.2 percent more jobs than was the case at the start of 2011. Not only was September the worst month for job losses so far in 2011, but it also saw both the monthly number of unemployed individuals and the unemployment rate hit annual highs. These findings come from new data from the Employment Security Commission of North Carolina.

“September erased virtually all of the meager progress that North Carolina’s job market had made during the first eight months of 2011,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Sizable losses in the private and public sectors canceled out more than three-fourths of the job gains recorded earlier in the year.”

In September, North Carolina employers cut 22,200 more payroll jobs than they added. Net losses occurred primarily in the public sector (-13,700 driven by a net loss of 16,400 local government jobs), while the private sector shed 8,500 jobs. May was the only other month in 2011 in which the private sector lost jobs, on net (also -8,500). Within the private sector, financial activities lost the most jobs in absolute terms (-3,000), followed by trade, transportation, and utilities (-2,100), education and health services (also -2,100), and leisure and hospitality services (-1,900). Construction gained the most jobs in absolute terms (+2,800).

A positive revision to the August data found that the state gained 2,900 more payroll jobs than first reported (+19,400, versus an original estimate of +16,500). With that adjustment, North Carolina has lost, on net, 308,600 positions, or 7.4 percent of its payroll base, since December 2007. Since bottoming out in February 2010, the state has netted an average of 758 payroll jobs per month, resulting in a cumulative gain of just 14,400 positions (+0.4 percent)

“Compared to December 2007, North Carolina has fewer payroll jobs in every major industry group except for educational and health services and leisure and hospitality services,” noted Quinterno. “While public-sector employment had been a source of strength earlier in the downturn, it now is weighing on growth. Since February 2010, local government employment has fallen by 4.7 percent with state government employment declining by 5.3 percent.”

Between September 2010 and September 2011, North Carolina gained, on net, 9,700 jobs (+ 0.3 percent). Net public-sector losses (-18,700) offset some two-thirds of the net growth that occurred in the private sector (+28,400 positions). In terms of individual private industries, professional and business services grew the most in absolute terms (+11,600, +2.4 percent). In the public sector, net losses stemmed from declines in state (-10,800, -5.5 percent) and local employment (-8,300, -1.9 percent).

The household data for September also were troubling. Last month, the size of the workforce rose slightly (+5,822, +0.1 percent) to 4.5 million. While the total number of employed individuals rose somewhat, most of the additional workers in the labor force joined the ranks of the unemployed (+4,498, +1 percent). In September, the number of unemployed workers reached an annual high, as well as the highest monthly total recorded since June 2010.

Over the year, the number of unemployed North Carolinians rose by 28,123 (+6.3 percent), while the number of employed individuals remained essentially flat at 4 million. Between September 2010 and September 2011, the size of the labor force increased by 32,370 individuals (+0.7 percent). Over the year, the unemployment rate rose to 10.5 percent from 10 percent. The September unemployment rate was the highest monthly one posted so far in 2011 and the highest one posted since June 2010, when the monthly rate also was 10.5 percent.

“North Carolina’s labor market has made no meaningful progress so far in 2011,” observed Quinterno. “The job gap has closed only marginally since January, and the unemployment rate has been trending upward since May. Especially alarming is the fact that the share of working-age North Carolinians with a job remains at the lowest level recorded since 1976. In September, 55.3 percent of working-age North Carolinians had jobs. This represents both a waste of human talent and a source of economic hardship for households and communities across the state.”

“The September job report illustrates that North Carolina, like the nation as a whole, is being savaged by a severe job crisis–a crisis that, by many indicators, is worsening. The seeming passivity of policymakers and civic leaders in the face of a crisis of such severity is becoming harder and harder to understand or accept.”