South By North Strategies, Ltd.

NC’s Job Market Goes Nowhere Fast

CHAPEL HILL (November 19, 2009) – October’s employment report from the Employment Security Commission offers more evidence that a jobless recovery is taking shape in North Carolina.

Last month, North Carolina employers added 12,100 more positions than they eliminated. This was the second time in three months in which the state netted some jobs. Nevertheless, the job market is not generating enough positions to absorb new workers or those displaced over the past year.

“Since reaching a low point in July, North Carolina’s job market has posted some gains,” says John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “October marks the first time in 15 months in which private payrolls grew slightly. While conditions may have stabilized, they are not necessarily improving.”

In October, North Carolina employers added 12,100 more positions than they shed. The public sector added 5,800 positions while the private sector netted 6,300 positions. Among private-sector industries, education and health services posted the largest gain (+5,800) while construction shed the most positions (-6,600). Additionally, a downward revision to the September employment report resulted in the net loss of another 2,500 positions.

“North Carolina’s job market is going nowhere fast,” adds Quinterno. “Even with some positive October data, private-sector hiring remains anemic. In fact, most hiring in the state is being driven by the public sector, either through direct hiring or through the financing of health care services. If not for government spending, employment conditions would be much worse.”

Despite the recent moderation in job losses, conditions have deteriorated markedly since October 2008, which is when North Carolina’s job market began its slide.

Compared to one year ago, the state has 188,100 fewer jobs (-4.6 percent) and 203,000 fewer private-sector ones (-6 percent). In terms of individual industries, manufacturing (-67,600) and construction (-42,200) lost the greatest number of positions over the past year, while construction declined the most in relative terms (-18 percent). Government employment has grown the most in both absolute (+14,400 positions) and relative (+2 percent) terms.

“The past year has been a horrible one for North Carolinians who depend upon paid employment to earn a living,” notes Quinterno. “Severe job losses have pushed unemployment to the highest levels posted since 1976, which is when modern records began being kept.”

The extent of joblessness is reflected in the household data for October. Last month, the labor force contracted by 1,106 individuals as discouraged workers abandoned job searches. Furthermore, the October unemployment rate of 11 percent tied June 2009 for the second-highest monthly state unemployment rate seen since 1976. And compared to a year ago, fewer Tar Heels are in the labor force or employed, and 1.5 times as many are unemployed.

“Right now, there is a tremendous amount of idle labor in North Carolina, both in terms of unemployed individuals and those who are effectively jobless but are not included in the official statistics,” continues Quinterno. “Even though labor market conditions have improved slightly over the past three months, the level of growth is insufficient to make much of a dent in the current situation.”

“Consumer demand is weak, economic conditions are uncertain, and employers have many alternatives to adding full-time positions,” says Quinterno. “Absent increased demand, North Carolina’s labor market will limp along well into the future.”

Local Job Markets Tread Water

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

Jobless Recovery Takes Hold in NC

CHAPEL HILL (October 16, 2009) – September’s employment report offered more proof that a jobless recovery has taken hold in North Carolina.

Last month, private-sector employers eliminated 13,600 more positions than they created. However, hiring in the public sector offset most of these losses, leading to a total statewide loss of just 600 positions. These findings come from data released today by the Employment Security Commission.

“Private-sector job creation has ground to a halt in North Carolina” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Private-sector payrolls have contracted for 14 straight months, and no meaningful growth has occurred at all since 2007. If not for government hiring made possible by the federal recovery act, employment conditions would be much worse.”

In September, North Carolina employers eliminated 600 more positions than they added. Private-sector employers eliminated 13,600 positions, with losses occurring in every major industry except for construction. These losses were offset by a net gain of 13,000 public-sector positions, primarily at the state (+4,600 positions) and local levels (+8,600 positions).

In a related, mildly positive development, the August payroll figures were revised upwards by 5,700, thereby lifting the total number of jobs gained in August from 7,000 to 12,700.

Recent months have seen a moderation in the rate of job losses in many industries, especially manufacturing and construction. Yet employment in almost every major industry remains well below the levels of a year ago. Between September 2008 and September 2009, total statewide employment fell by 208,300 positions (5 percent). Private-sector employment decreased by 218,500 positions (6.8 percent).

In terms of individual industries, manufacturing (-70,200) and trade, transportation, and utilities (-41,800) lost the greatest number of positions over the past year, while construction declined the most in relative terms (-15 percent).

“The best that can be said right now is that job losses have leveled off,” notes Quinterno. “At the same time, there is little evidence that conditions will improve anytime soon. North Carolina’s employment market appears stuck in place.”

The moderation in the pace of labor market decline is reflected in the household data for September. Last month, the labor force grew by 12,553 individuals as discouraged workers resumed job searches.  Nevertheless, the statewide unemployment rate held steady at 10.8 percent. Compared to a year ago, fewer Tar Heels are in the labor force or employed, and more are unemployed. In fact, the number of unemployed persons grew by 59 percent over the last year.

“Absent the federal recovery package, North Carolina’s job market would be in much worse shape,” continues Quinterno “That assistance is welcome, but in the long-run, little will change without robust private-sector hiring. Unfortunately, there is no evidence that private-sector employment is about to rebound anytime soon. Consumer demand is weak, economic conditions are uncertain, and employers have many alternatives to adding full-time positions.”

“This is what a jobless recovery looks like,” says Quinterno.

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

New Blog Focuses on Economic, Social Policy

CHAPEL HILL (October 14, 2009) – This morning, South by North Strategies, Ltd. unveiled Policy Points, a new blog focused on economic and social policy issues relevant to North Carolina.

“The recession has raised the importance of economic and social policy, yet the sheer volume of national information coupled with a relative lack of state-specific data makes it hard to get a firm understanding of what is happening in North Carolina,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy.

“Policy Points aims to fill that void,” adds Quinterno.”The goal is to provide journalists with a font of story ideas, policymakers with state-specific information, and the interested public with a place where they can learn about the issues of the day.”

Policy Points provides North Carolina journalists and public leaders with an accessible source of economic and social information. During the business week, the blog will offer analyses of state and national socio-economic data, commentary on trends, links to informative media stories, and access to timely policy and research reports.

The blog was created as part of a redesign of the web site of South by North Strategies, Ltd. Besides containing Policy Points, the site also has information about the firm, summaries of past projects, and an archive of past reports and media releases.

The blog may be viewed directly on the web or via RSS feed.

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

Local Labor Markets Little Improved in August

CHAPEL HILL (September 25, 2009) – Recessionary conditions remained the norm in August for local labor markets across North Carolina. Last month, 63 counties posted double-digit rates of unemployment; of these, 34 had unemployment rates of at least 12 percent. These findings come from data released today by the Employment Security Commission.

“Despite the talk about an improving economy, labor markets across North Carolina remain extraordinarily weak,” says John Quinterno, a principal at South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Not only are some two-thirds of the state’s counties coping with double-digit rates of unemployment, but many are undergoing wrenching contractions in the size of their labor forces.”

August was the first month since October 2008 in which North Carolina employers created more positions than they eliminated (+7,000, driven almost entirely by government hiring). Since the recession’s onset, North Carolina has lost, on net, 253,400 payroll jobs – an amount equivalent to over 6 percent of all the jobs that existed in December 2007. Last month, 10.7 percent of the labor force was unemployed (unadjusted rate).

In August, every part of the state confronted weak labor markets. Unemployment rates exceeded 10 percent in 69 counties, and in 34 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged  from 5.1 percent in Currituck County to 16.5 percent in Scotland County.

All 14 of the state’s metropolitan areas also struggled in August. Seven metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.6 percent) followed by Rocky Mount (13.8 percent). The lowest metro unemployment rate was eight percent in Durham-Chapel Hill.

“Changes in local unemployment rates must be taken with a spoonful of salt,” adds Quinterno. “The lack of seasonal adjustment limits the usefulness of month-to-month comparisons. The unemployment rate itself also doesn’t capture changes in the size of the labor force. Because people who exit the labor force are not included in the official count, the abandonment of job searches by discouraged workers can make unemployment rates fall at the same time that overall joblessness is rising.”

The more accurate comparison is to contrast local data from August 2009, and August 2008. In every North Carolina county and metro area, unemployment rates were higher in August 2009, than they were a year ago. Also compared to a year ago, nearly half of all counties and 13 metro areas had smaller labor forces. This suggests that joblessness is more widespread than reflected in the unemployment rate.

“Improvements in the labor markets of North Carolina’s three largest metropolitan regions will be critical to any meaningful statewide economic recovery,” notes Quinterno. “There was little evidence of that occurring in August. Last month, the unemployment rate stood at 12.5 percent in Charlotte, 11.3 percent in the Piedmont Triad, and 8.6 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, as well as smaller labor forces.”

“Perhaps the best that can be said about local labor markets in North Carolina is that things are not as bad as they could have been, thanks in large part to the federal recovery package,” observes Quinterno. “Unfortunately, robust economic and job growth still appear to be well over the horizon.”

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