South By North Strategies, Ltd.

NC’s Labor Market Swung Wildly in July

CHAPEL HILL, NC (August 21, 2020) – In July, employers in North Carolina collectively added 57,200 more payroll jobs than they cut (+1.4 percent), with net gains in the government sector generating 76 percent of the total increase. The July household survey, meanwhile, recorded a rise in unemployment, with the statewide unemployment rate increasing to 8.5 percent and the number of unemployed persons jumping by 18 percent to 419,812.

These findings come from new data released today by the Labor and Economic Analysis Division of the North Carolina Department of Commerce.

“The COVID-19 crisis continues to scramble North Carolina’s labor market,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Sizable month-to-month fluctuations should not obscure the fact that, since February, employers collectively have eliminated 325,700 payroll jobs, with all of the losses originating in the private sector. Compared to February, the state has 7.1 percent fewer jobs.”

In July 2020, employers added 57,200 more payroll jobs than they cut, as firms continued to re-open following the relaxation of various stay-at-home orders. For instance, the number of payroll positions tied to accommodation & food service establishments rose by 8,500 (+2.2 percent). Even with that gain, the sector is almost 30 percent smaller than it was in February.

Collectively, public-sector employers added 43,400 more jobs than they cut in July (+6.2 percent), with virtually all of the job creation occurring among local governments. The private sector, in contrast, netted 13,800 payroll positions (+0.4 percent). Within private industry, the leisure and hospitality sector netted the most positions (+8,500, +2.2 percent), followed by the professional and business services sector (+4,800, +0.8 percent) and the trade, transportation & utilities sector (+3,600, + 0.4 percent). Those gains were offset by net losses in the manufacturing sector (-5,600, -1.3 percent) and the other services sector (-1,000, -0.6 percent).

“The COVID-19 crisis ended the economic expansion that began in North Carolina in early 2010,” observed Quinterno. “Since February, the state has given back 72 percent of all the job growth that occurred in North Carolina between late 2007 and early 2020. For more perspective, consider how, since February, the state has lost about the same number of jobs as it did at the worst part of the last recession. North Carolina has experienced in five months job losses that took a bit more than two years to occur in a downturn widely regarded as being horrific.”

The July household survey offered further evidence of a wildly gyrating labor market. Last month, the unemployment rate rose to 8.5 percent from the 7.5 percent rate logged in June. Month-over-month, the number of unemployed persons rose by 62,712 (+17.6 percent), rising to 419,812 from 357,100. At the same time, the number of people in the labor force rose by some 135,000 people in July, which suggests that more workers have returned to work or resumed looking for work.

“Since February, the number of unemployed North Carolinians has more than doubled, rising to 419,812 from 182,606,” noted Quinterno. “Over that period, the statewide unemployment rate has more than doubled, jumping to 8.5 percent from 3.6 percent. For various technical reasons, that estimate is likely an undercount of the true extent of joblessness in the state.”

Also, since February, an estimated 192,505 people have exited the state’s labor force entirely, thereby reducing its size to 4.9 million from 5.1 million (-3.8 percent). In July, the share of the working-age population even participating in the labor force was 58.9 percent, down from 61.6 percent in February.

Moreover, the number of employed persons has fallen to 4.5 million from 4.9 million since February. In July, only 53.9 percent of working-age North Carolinians were employed, up from June’s rate of 53.1 percent, but down sharply from February’s rate of 59.4 percent.

“The monthly employment data, while important, are lagging well behind actual economic and public health facts on the ground,” cautioned Quinterno. “The monthly employment report provides a snapshot of conditions in mid-July, but the most recent weekly unemployment insurance claims report showed that North Carolina was paying or processing 228,244 claims for regular unemployment insurance benefits, along with 188,906 claims for Pandemic Unemployment Assistance, which extends insurance to individuals who are otherwise ineligible. Another 208,000 claims were filed for other programs, primarily Pandemic Emergency Unemployment Compensation, which provides benefits to those who have exhausted their regular benefits. All of this suggests that unemployment remains a problem of crisis proportions.”

Also, the COVID-19 crisis has worsened since the middle of July. Based on one analysis of public health data, the total number of confirmed cases in North Carolina has almost doubled since July 12, rising to 149,900 confirmed cases from 85,700. This has led the state to continue its go-slow approach to re-opening while causing some local governments to impose new restrictions on economic activities or to extend existing restrictions. The impact of these developments is not reflected in the July employment report, nor is the fallout in university communities where campuses opened only to quickly close and return to online operations.

“The actions necessary to fight the novel coronavirus and protect public health have caused chaos in North Carolina’s labor market,” reflected Quinterno. “While job growth has trended up in recent months, the state has lost about as many jobs as it did at the worst part of the Great Recession. Many of the recent gains are tenuous and could be erased by deteriorating public health conditions. By any measure, North Carolina is mired in a severe recession.”

“The virus is what is driving the negative impacts on households and businesses,” warned Quinterno. “Conditions may very well worsen over the fall if new lockdowns prove necessary, if Congress fails to re-authorize various forms of federal aid like enhanced unemployment insurance and economic impact payments, and if public-sector employers slash their payrolls and spending in response to collapsing tax revenues.”

“State and federal policymakers must prepare for a prolonged crisis and deliver long-term aid to individual households and firms at a scale and for a duration longer than envisioned when Congress passed the CARES Act. Action is needed on every front sooner rather than later.”

North Carolina’s Labor Market Continues Its Wild Ride

CHAPEL HILL, NC (July 17, 2020) – In June, employers in North Carolina collectively added 173,200 more payroll jobs than they cut (+4.3 percent), with net gains in the broad leisure and hospitality services sector generating 40 percent of the total increase. The June household survey, meanwhile, recorded a drop in unemployment, with the statewide unemployment rate falling to 7.6 percent and the number of unemployed persons declining by 41 percent.

These findings come from new data released today by the Labor and Economic Analysis Division of the North Carolina Department of Commerce.

“The COVID-19 crisis has scrambled North Carolina’s labor market,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Sizable month-to-month fluctuations should not mask the fact that, since February, employers collectively have eliminated 377,300 payroll jobs, with 89.5 percent of the losses originating in the private sector. Compared to a year ago, the state has 7.4 percent fewer jobs.”

In June 2020, employers added 173,200 more payroll jobs than they cut as shuttered firms re-opened following the relaxation of various stay-at-home orders. For instance, the number of payroll positions tied to accommodation & food service establishments rose by 55,900 (+20.6 percent), while the number of positions in retail trade establishments rose by 18,000 (-4 percent).

Collectively, private-sector employers added 152,400 more payroll jobs than they cut in June (+4.5 percent). Within private industry, the leisure and hospitality sector netted the most positions (+68,900, +22.3 percent), followed by the trade, transportation & utilities sector (+22,300, + 2.8 percent); the other services sector (+19,600, +14.2 percent); and the education and health services sector (+18,900, +3.3 percent). Even with these gains North Carolina had 306,200 fewer private-sector jobs (-8 percent) than it did a year ago.

“The COVID-19 crisis ended to the economic expansion that began in North Carolina in early 2010,” observed Quinterno. “Since February, the state has given back about almost half of the net job growth logged during the decade-long expansion. For even more perspective, consider how in June 2020, North Carolina had just 303,000 more jobs than it did in June 2000.”

The June household survey offered further evidence of a scrambled labor market. Last month, the unemployment rate fell to 7.6 percent from the 12.8 percent rate logged in May. Month-over-month, the number of unemployed persons fell by 252,000 (-40.9 percent), dropping to 363,465 from 615,512. Note, however, that 24,549 people left the labor force entirely last month. If those individuals were counted as unemployed, the unemployment rate would have been 8.1 percent.  

“Since February, the number of unemployed North Carolinians has doubled, rising to 363,465 from 182,606,” noted Quinterno. “Over that period, the statewide unemployment rate more than doubled, jumping to 7.6 percent from 3.6 percent. For various technical reasons, that estimate is likely an undercount of the true extent of joblessness in the state.”

Also, since February, an estimated 322,976 people have exited the state’s labor force entirely, thereby reducing its size to 4.8 million from 5.1 million (-6.3 percent). In June, the share of the working-age population even participating in the labor force was 57.4 percent, down from 61.6 percent in February.

Moreover, the number of employed persons has fallen to 4.4 million from 4.9 million since February. In June, only 53.1 percent of working-age North Carolinians were employed, up from May’s rate of 50.4 percent, but down sharply from February’s rate of 59.4 percent.

“The monthly employment data, while important, are lagging well behind actual economic and public health facts on the ground,” cautioned Quinterno. “The monthly employment report provides a snapshot of conditions in mid-June, but the most recent weekly unemployment insurance claims report showed that North Carolina was paying or processing 385,631 claims for regular unemployment insurance benefits, along with 237,113 claims for Pandemic Unemployment Assistance, which extends insurance to individuals who are otherwise ineligible. This suggests that unemployment remains a serious problem for hundreds of thousands of North Carolinians.”

Also, the COVID-19 crisis has worsened since the middle of June. Based on one analysis of public health data, the total number of confirmed cases in North Carolina has more than doubled since June 12, rising to 95,500 confirmed cases from 41,200. This has led the state to slow the pace of re-opening while causing some local governments to impose new restrictions on economic activities. The impact of these developments is not reflected in the June employment report.

“The actions necessary to fight the novel coronavirus and protect public health have caused chaos in North Carolina’s labor market,” reflected Quinterno. “While job growth accelerated in June following the relaxation of various state and local stay-at-home orders, those gains are tenuous and could be erased by deteriorating public health conditions. Even with those gains, labor market conditions remain much worse than they were at the start of the year.”

“The virus is what is driving the negative impacts on households and businesses,” warned Quinterno. “Conditions may very well worsen over the summer if new lockdowns prove necessary, if Congress permits various forms of federal aid like enhanced unemployment insurance and the Paycheck Protection program to expire, and if public-sector employers slash their payrolls and spending in response to collapsing tax revenues.”

“State and federal policymakers must prepare for a prolonged crisis and deliver long-term aid to individual households and firms at a scale and for a duration longer than envisioned when Congress passed the CARES Act. Action is needed sooner rather than later.”

North Carolina’s Labor Market Still in Crisis in May

CHAPEL HILL, NC (June 19, 2020) – In May, employers in North Carolina collectively added 67,100 more payroll jobs than they cut (+1.7 percent), with net gains in the private sector offset by net losses in the public sector. The May household survey, meanwhile, recorded a large increase in the number of unemployed North Carolinians. The state unemployment rate was 12.9 percent, which was tied with the April 2020 rate for the highest logged in any month since 1976.

These findings come from new data released today by the Labor and Economic Analysis Division of the North Carolina Department of Commerce.

“The COVID-19 crisis has devastated North Carolina’s labor market,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Since February, employers collectively have eliminated 548,700 payroll jobs, with 89 percent of the losses originating in the private sector. Prior to the COVID-19 crisis, the last time North Carolina had so few payroll jobs was in August 2013.”

In May 2020, employers added 67,100 more payroll jobs than they cut as shuttered firms re-opened following the relaxation of various state and local stay-at-home orders. For instance, the number of payroll positions tied to food service and drinking establishments rose by 40,100 (+19.1 percent).

Collectively, private-sector employers added 102,700 more payroll jobs than they cut in May (+3.1 percent). Within private industry, the leisure and hospitality sector netted the most positions (+44,800, +16.8 percent), followed by the trade, transportation & utilities sector (+17,200, + 2.2 percent) and the education and health services sector (+16,700, +3 percent). The net increase in that sector was due to the re-opening of establishments offering ambulatory health care services.

More than a third of the private-sector gain, however, was erased by net reductions by public-sector employers, which collectively cut 35,600 more jobs than they added (-5 percent). Public-sector losses were driven overwhelmingly by net cuts in state and local educational employment.

“The COVID-19 crisis ended to the economic expansion that began in North Carolina in early 2010,” observed Quinterno. “Since February, the state has given back about 70 percent of the net job growth logged during the decade-long expansion. For further perspective, consider how in May 2020, North Carolina had just 150,400 more jobs than it did in May 2000.”

The May household survey offered further evidence of a labor market in crisis. Last month, the unemployment rate reached 12.9 percent, which was the same rate posted in April following data revisions. A monthly rate of 12.9 percent is the highest rate recorded in North Carolina in the history of the modern data series, which dates to 1976. Last month, 621,713 North Carolinians were unemployed, which also was the highest figure logged in any month since 1976.  

“Since February, the number of unemployed North Carolinians has more than tripled, rising to 621,713 from 182,606,” noted Quinterno. “Over that period, the statewide unemployment rate also has more than tripled, jumping to 12.9 percent from 3.6 percent. For various technical reasons, that estimate is likely an undercount of the true extent of joblessness in the state.”

Also, since February, an estimated 293,000 people have exited the state’s labor force entirely, thereby reducing its size to 4.8 million from 5.1 million. In May, the share of the working-age population even participating in the labor force was 57.9 percent. While up from April, the state’s labor force participation rate is hovering near the lowest value posted since 1976.

Moreover, the number of employed persons has fallen to 4.2 million from 4.9 million since February. In May, only 50.4 percent of working-age North Carolinians were employed, up from April’s rate of 49.4 percent, which was the lowest monthly value logged since 1976.

“The actions necessary to fight the novel coronavirus and protect public health have caused chaos in North Carolina’s labor market,” reflected Quinterno. “While job growth ticked up in May following the relaxation of various state and local stay-at-home orders, record numbers of people in North Carolina are jobless and are unlikely to return to work anytime soon. In fact, the numbers likely will worsen over the summer if various forms of federal aid like enhanced unemployment insurance and the Paycheck Protection program expire and if public-sector employers slash their payrolls and spending in response to collapsing tax revenues.”

“The virus is what is driving the negative impacts on households and businesses,” warned Quinterno. “State and federal policymakers must prepare for a prolonged crisis and deliver long-term aid to individual households and firms at a scale and for a duration longer than envisioned when Congress passed the CARES Act. Action is needed sooner rather than later.”

North Carolina’s Unemployment Rate Soars to 12.2 Percent in April

CHAPEL HILL, NC (May 22, 2020) – In April, employers in North Carolina collectively eliminated 571,700 more payroll jobs than they added (-12.5 percent), with losses occurring in every major industrial sector. The April household survey, meanwhile, recorded a massive increase in the number of unemployed North Carolinians. The state unemployment rate rose to 12.2 percent, which is the highest rate logged in any month since 1976.

These findings come from new data released today by the Labor and Economic Analysis Division of the North Carolina Department of Commerce.

“The COVID-19 crisis has had a devastating impact on North Carolina’s labor market,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Last month, employers collectively eliminated 571,000 payroll jobs, which was the greatest contraction recorded in any month since 1990. Since February, 13 of every 100 payroll jobs in the state simply have disappeared.”

In April 2020, North Carolina employers cut 571,000 more payroll jobs than they added (-12.5 percent), with the private-sector responsible for 95 percent of the net loss. Within private industry, the leisure and hospitality sector shed the most positions (-249,800, -48.8 percent), followed by the education and health services sector (-63,200, -10.2 percent); the trade, transportation & utilities sector (-63,200, -7.5 percent); the professional and business services sector (-66,700, -8.6 percent); and the manufacturing sector (-51,200, -10.8 percent.) And government payrolls contracted by 26,000 positions (-3.5 percent), due primarily to the loss of 20,500 local government jobs (-4.5 percent).

“The onset of the coronavirus crisis ended the economic expansion that began in North Carolina in early 2010,” observed Quinterno. “During that decade of steady, if insufficient, job growth, the total number of payroll jobs in North Carolina rose by 20 percent, climbing to 4.6 million from 3.8 million. Since February, the state has given back about 80 percent of that net job growth, with even more losses likely to occur in coming months.”

The April household survey provided further evidence of a labor market that has fallen into crisis. Last month, the unemployment rate soared to 12.2 percent, which was the highest monthly rate recorded in North Carolina in the history of the modern data series, which dates to 1976. Last month, 573,188 North Carolinians were unemployed, which also was the highest figure logged in any month since 1976.

“Since February, the number of unemployed North Carolinians has more than tripled, rising to 573,118 from 182,606,” noted Quinterno. “Over that period, the statewide unemployment rate also has more than tripled, jumping to 12.2 percent from 3.6 percent. For various technical reasons, that estimate is likely an undercount of the true extent of joblessness in the state.”

Also, since February, an estimated 429,000 people have exited the state’s labor force entirely, thereby reducing its size to 4.7 million from 5.1 million. The last time the labor force was so small was in mid-2014. In April, the share of the working-age population even participating in the labor force dropped to 56.3 percent, the lowest monthly figure ever posted since 1976.

Moreover, the number of employed persons has fallen to 4.1 million from 4.9 million since February. The last time so few people were employed was in early 2010. In April, only 49.4 percent of working-age North Carolinians were employed, which was the lowest monthly value ever logged since 1976.

“The actions necessary to fight the novel coronavirus and protect public health have caused chaos in North Carolina’s labor market,” reflected Quinterno. “Large numbers of North Carolinians have lost work through no fault of their own, and the numbers are apt to rise in coming months. No communities or populations will be spared, although some people and places will suffer much, much more than others absent help.”

“The virus is what is driving the negative impacts on households and businesses,” warned Quinterno. “State and federal policymakers must prepare for a prolonged crisis and deliver long-term aid to individual households and firms at a scale and for a duration longer than envisioned when Congress passed the CARES Act. An essential part of any response should be the provision of meaningful aid to state and local governments to prevent the employment crisis from spilling into the public sector and causing both direct job losses and losses tied to the termination of contracts with private-sector vendors in response to budget cuts.”

Community Action Programs Boost NC’s Economy

RALEIGH, NC (October 10, 2018) – Every $1 in spending on community action programs in North Carolina generates more than $2 in additional economic output. If not for the community action funding provided annually under the federal Community Services Block Grant Act, the state would have a smaller economy, fewer jobs, and fewer tax dollars to support public services.

These findings come from a new economic impact study commissioned by the North Carolina Community Action Association, Inc., a nonprofit membership organization that represents the state’s 34 local community action agencies. The study was developed by South by North Strategies, Ltd., a research consultancy specializing in economic and social policy.

“North Carolina’s community action network exists to help individual men and women transcend poverty,” said Sharon Goodson, Executive Director of the North Carolina Community Action Association. “Community action agencies provide significant—though significantly overlooked—positive impacts on the overall economy of North Carolina.”

In 2016, North Carolina’s community action agencies expended some $20 million in federal resources provided under the Community Services Block Grant Act, the nation’s only program focused exclusively on reducing poverty in a comprehensive manner. Moreover, local agencies used their modest federal grants to leverage an additional $245 million in public and private resources to support anti-poverty initiatives in all 100 counties.

“The funds spent on community action programs in North Carolina not only ameliorate poverty, but they also enhance the state’s economy, as measured by economic output, employment, labor income, and tax receipts,” said John Quinterno, Principal of South by North Strategies who coordinated the development of the economic impact study.

The study considered two scenarios: a conservative one that analyzed only the federal funds granted to the state under the Community Services Block Grant Act and a more expansive one that included leveraged funds and certain program outcomes. Key findings include the following:

• Community Services Block Grant funding, when combined with certain direct program outcomes, generates $43 million in additional statewide economic output annually; when leveraged funds are included, statewide economic output rises by $450 million. In short, every $1 in program spending sparks more than $2 in added economic output.
• Community Services Block Grant funding, when combined with certain direct program outcomes, supports a total of 415 jobs across all industry sectors; when leveraged funds are included, a total of 5,123 jobs are supported through funding for community action.
• Community Services Block Grant funding, when combined with certain direct program outcomes, produces an estimated $16 million annually in additional labor income; when leveraged funds are included, community action resources boost labor income in North Carolina by $195 million annually.
• Community Services Block Grant funding, when combined with certain direct program outcomes, yields an estimated $2 million annually in additional state and local tax revenues; when leveraged funds are included, community action resources expand state and local tax collections by $23 million per year.

“This study shows the powerful extent to which community action works for North Carolina,” said Dr. Landon Mason, President of the North Carolina Community Action Association and Executive Director of the Economic Improvement Council, Inc. in Edenton.

“If not for its community action network,” added Dr. Mason, “North Carolina would have a smaller economy that offers fewer job opportunities, reduced earnings, and fewer tax receipts to support vital public services—all while tens of thousands of low-income residents would be left to confront poverty on their own.”

Click here to access the full report.