South By North Strategies, Ltd.

Public-Sector Cuts Hobble N.C.’s Labor Market

CHAPEL HILL (July 22, 2011) – In June, employers in North Carolina eliminated 9,500 more payroll positions than they added, according to data released today by the Employment Security Commission. Private-sector job creation ground to a virtual halt, while the public sector shed 10,200 positions. The public-sector losses alone canceled out 42 percent of the private-sector job gains recorded in 2011.

“June was an abysmal month for 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. “There was little evidence of any sort of recovery, and in several important respects, labor market conditions actually deteriorated.”

Last month, North Carolina employers cut 9,500 more payroll positions than they added. Net losses occurred exclusively in the public sector (-10,200, driven by a -7,600 decline in state government), while the private sector added 700 positions. Most private-sector industries posted little or no job growth in June. The one exception was leisure and hospitality services, which gained 4,400 positions; unfortunately, that gain was more than offset by the loss of 5,400 positions in professional and business services.

Also, a revision to the May data found that the state lost 2,800 more payroll jobs than first reported (-10,200 versus an original estimate of -7,400). With that revision, North Carolina has lost, on net, 301,000 positions, or 7.2 percent of its payroll base, since December 2007.

“Compared to December 2007, North Carolina has fewer payroll jobs in every major industry sector except for educational and health services and leisure and hospitality services,” noted Quinterno. “Even there, the growth has been modest.”

Between June 2010 and June 2011, North Carolina lost, on net, 2,700 jobs (a 0.1 percent decline). All of the growth that occurred in the private sector (+28,300 positions) was more than offset by losses in the public sector (-31,600). In terms of individual private industries, professional and business services grew the most in absolute terms (+12,000), while construction shed the most jobs in absolute and relative terms (-6,800, -3.8 percent). In the public sector, net job loss was driven by declines in state government (-15,500, -7.8 percent).

The household data for June also were alarming. Last month, the total number of employed individuals fell by 9,888 (-0.2 percent), while the number of unemployed individuals rose by 9,516 (+2.2 percent). The size of the workforce was essentially unchanged.

Over the year, the number of unemployed North Carolinians fell by 28,069 (-5.9 percent). Unfortunately, much of this decline was attributable to individuals exiting the labor force. Between June 2010 and June 2011, the size of the labor force contracted by 17,970 individuals (-0.4 percent). Over the year, the unemployment rate fell to 9.9 percent from 10.5 percent.

“North Carolina’s labor market remains down and out,” observed Quinterno. “Two years into a supposed recovery, the share of the adult population with a job actually is lower than was the case in December 2007. In June 2011, only 55.8 percent of working-age North Carolinians had jobs, compared to 62.4 percent in December 2007.”

“The June employment report offers yet more proof that the state’s labor market is not recovering,” added Quinterno. “Since the labor market bottomed out in December 2009, the total number of jobs in the state has increased by just 0.5 percent. Growth actually turned negative in recent months due to layoffs in the public sector. Sadly, nothing in the June jobs report suggests that any improvements are imminent.”

“2011 is shaping up to be yet another lost year for working North Carolinians.”

Summertime Employment Blues: June 2011

CHAPEL HILL (July 8, 2011) – In June, the American economy added only 18,000 more payroll jobs than it lost. Most major industries recorded little net job growth in June, and as a result, the share of the labor force that was underemployed rose to 16.2 percent. These findings come from today’s national employment report.

“The national labor market is deteriorating,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Conditions have weakened throughout 2011, though earlier declines were attributed to one-time or seasonal factors. The June employment report exposes how weak the rationalizations have been and lays bare the stark fact that the American jobs machine is not working.”

In June, the nation’s employers added 18,000 more payroll positions than they cut. Gains occurred entirely within the private sector (+57,000), while government payrolls fell by 39,000 positions due mainly to cuts by local and state governments. In recent months, public-sector reductions have weighed down job growth; in June, for instance, government reductions offset 68.4 percent of the total private-sector gain.

Moreover, the payroll employment estimates for April and May were lowered. With the revisions, the economy netted 242,000 jobs over those two months rather than the 286,000 positions previously reported.

Private-sector payroll levels in most every major industry were flat in June. Leisure and hospitality services added the most positions (+34,000), followed by trade, transportation and utilities (+17,000). Financial activities shed the most positions on net (-15,000).

“The June employment report is a terrible one,” noted Quinterno. “Over the past three months, net job growth has averaged just 86,700 positions. This is not what a recovery looks like.”

The inability of the current pace of job growth to change employment conditions was reflected in the June household survey. Last month, 14.1 million Americans (9.2 percent of the labor force) were jobless and seeking work. While the unemployment rate and number of unemployed individuals dropped over the past year, so did the share of the population participating in the labor market. In June, the share of the population participating in the labor force (64.1 percent) remained at a level last seen in the early 1980s.

Another cause for concern is the fact the number of newly unemployed individuals has been trending upward throughout 2011. Last month, 21.7 percent of all unemployed individuals had been jobless for less than 5 weeks. At the other end of the spectrum, the share of workers unemployed for more than six months remained abnormally high. Last month, 44.4 percent of all unemployed workers had been out of work for at least 27 weeks.”

In June, proportionally more adult male workers were unemployed than female ones (9.1 percent vs. 8 percent). Similarly, unemployment rates were higher among Black (16.2 percent) and Hispanic workers (11.6 percent) than among White ones (8.1 percent). The unemployment rate among teenagers was 24.5 percent. Between May and June, unemployment rates for most every major demographic group showed little change.

Additionally, 8.8 percent of all veterans were unemployed in June. The unemployment rate among recent veterans (served after September 2001) was 13.3 percent.

“Jobs remained scarce in June,” added Quinterno. “Last month, the underemployment rate equaled 16.2 percent. Among unemployed workers, the average time out of work was 39.9 weeks.”

“The June employment report shows that the American labor market is not healing itself and that policymakers must take employment issues much more seriously,” observed Quinterno. “Absent focused attention and aggressive action, long-term joblessness is likely to become a permanent scar on American society.”

May Local Employment Report

South by North Strategies will not be releasing a written analysis of the May 2011 jobs report for local communities in North Carolina on the morning of June 24, 2011.

Firm representatives, however, will be available for comment via phone or email, preferably email. Interested journalists should contact John Quinterno at johnq[at]sbnstrategies[dot]com or 919-622-2392.

Thank you for your interest in South by North Strategies, Ltd.

Job Growth Turns Negative In May

CHAPEL HILL (June 17, 2011) – In May, employers in North Carolina eliminated 7,400 more payroll positions than they added, according to data released today by the Employment Security Commission. May marked the first month in 2011 in which North Carolina lost more jobs than it gained; in fact, the May losses offset 22 percent of the job growth recorded earlier in the year.

“North Carolina’s labor market continues to spin its wheels,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “The recovery has not yet delivered much in the way of meaningful job growth.”

Last month, North Carolina employers cut 7,400 more payroll positions than they added. Net losses occurred in the private (-6,400) and public (-1,000) sectors. Among private industries, professional and business services lost, on net, the most positions (-4,000), followed by other services (-2,400), and trade, transportation, and utilities (-1,400). The losses were offset by gains in financial activities (+1,500) and construction (+900).

Also, a revision to the April data found that the state gained 2,400 fewer payroll jobs than first thought (+500 versus an original estimate of +2,900). With that revision, North Carolina has lost, on net, 288,700 positions, or 6.9 percent of its payroll employment base, since December 2007.

“So far in 2011, North Carolina’s labor market has gained just 26,200 more jobs than it has lost,” noted Quinterno. “Particularly alarming is the fact that growth has slowed as the year has unfolded. The labor market is not moving in the right direction.”

Between May 2010 and May 2011, North Carolina lost, on net, 1,000 jobs (a zero percent change). All of the growth that occurred in the private sector (+31,500 positions) was more than offset by losses in the public sector (-32,500). In terms of individual private industries, professional and business services grew the most in absolute and relative terms (+19,200, +4 percent), while construction shed the most jobs in absolute and relative terms (-8,000, -4.5 percent). In the public sector, net job loss occurred at the federal level (-17,400, due to temporary census hiring), at the state level (-5,800), and the local level (-9,300).

The household data for May, meanwhile, were unimpressive. Last month, the total number of employed individuals increased by 12,040 (+0.3 percent), while the number of unemployed individuals was essentially unchanged. The size of the workforce also grew by 12,139 individuals (+0.3 percent).

Over the year, the number of unemployed North Carolinians fell by 55,097 (-11.2 percent). Unfortunately, much of this decline was attributable to individuals exiting the labor force. Between May 2010 and May 2011, the size of the labor force contracted by 39,929 individuals (-0.9 percent). Over the year, the unemployment rate fell to 9.7 percent from 10.8 percent.

“The developments of the past year have 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. In fact, the share of the adult population with a job is lower now than it was in December 2007. In May 2011, 56.2 percent of working-age North Carolinians had jobs, compared to 62.4 percent in December 2007.”

“The May jobs report offers yet more proof that the state’s labor market is not mending itself,” added Quinterno. “Since the labor market bottomed out in December 2009, the total number of jobs in the state has increased by just 0.8 percent. Growth actually has slowed in recent months, and indicators suggest that few meaningful improvements will occur anytime soon.”

Slip Sliding Away

CHAPEL HILL (June 3, 2011) – In May, the American economy added just 54,000 more payroll jobs than it lost—a pace of growth inconsistent with an economic recovery. Net job creation ground to a halt in most major industries, and consequently, 15.8 percent of the labor force was effectively jobless. These findings come from today’s national employment report.

“The national labor market gave up much ground in May,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Job growth fell well below the level needed to accommodate the natural growth of the labor force, and the share of the working-age population with a job remained near a level last seen in the early 1980s.”

In May, the nation’s employers added 54,000 more payroll positions than they cut; this marked the eighth consecutive month of job growth in the United States. Gains occurred entirely within the private sector (+83,000), while government payrolls fell by 29,000 positions due overwhelmingly to cuts by local governments. In recent months, public-sector reductions have weighed down job growth; in May, for instance, government reductions offset 34.9 percent of the total private-sector gain.

Moreover, the payroll employment estimates for March and April were lowered. With the revisions, the economy netted 426,000 jobs over those two months rather than the 465,000 positions previously reported.

Private-sector job gains in May occurred primarily in professional and business services (+44,000), education and health services (+34,000), and mining and logging (+6,000). Job levels in all other private-sector industries held fairly steady in May.

“The May employment report suggests that job growth is slowing and that the national labor market is giving back some of the modest gains logged earlier in the year,” noted Quinterno. “Over the past three months, net job growth has averaged 160,000 positions, but that pace is insufficient to reverse the recession’s damage anytime soon.”

The inability of the current pace of job growth to change employment conditions was reflected in the May household survey. Last month, 13.9 million Americans (9.1 percent of the labor force) were jobless and seeking work. While the unemployment rate and number of unemployed individuals dropped over the past year, so did the share of the population participating in the labor market. In May, the share of the population participating in the labor force (64.2 percent) remained at a level last seen in the early 1980s.

Another cause for concern is the fact the number of newly unemployed individuals has been trending upward throughout 2011. Last month, 19.4 percent of all unemployed individuals had been jobless for less than 5 weeks. At the other end of the spectrum, the share of workers unemployed for more than six months also has been trending upward. Last month, 45.1 percent of all unemployed workers had been out of work for at least 27 weeks.”

In May, proportionally more adult male workers were unemployed than female ones (8.9 percent vs. 8 percent). Similarly, unemployment rates were higher among Black (16.2 percent) and Hispanic workers (11.9 percent) than among White ones (8 percent). The unemployment rate among teenagers was 24.2 percent. Between April and May, unemployment rates for most every major demographic group were little changed.

Additionally, 8.3 percent of all veterans were unemployed in May. The unemployment rate among recent veterans (served after September 2001) was 12.1 percent.

“Despite the growth in payroll employment, jobs remained difficult to find in May,” added Quinterno. “Last month, the underemployment rate equaled 15.8 percent. Among unemployed workers in May, the average time out of work was 39.7 weeks.”

“The May employment report suggests that job growth in the private sector has slowed with much of the growth that is occurring being canceled out by job losses in the public sector,” observed Quinterno. “The labor market clearly is not healing itself, and today’s report should catapult job issues to the forefront of the nation’s policy and political debates.”