South By North Strategies, Ltd.

No “Springing Forward” For NC’s Labor Market

CHAPEL HILL (May 18, 2012) – The change in seasons was not accompanied by improvements in North Carolina’s labor market. Payroll employment levels essentially were flat in April and were only slightly higher than was the case a year ago. While the unemployment rate fell to the lowest level recorded since early 2009, the drop stemmed from a decline in the size of the state’s labor force, not an increase in employment. These findings come from new data released by the Labor and Economic Analysis Division of the NC Department of Commerce.

“Job growth in North Carolina has slowed steadily over the course of 2012,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Compared to last December, North Carolina has 25,900 more jobs, but 85 percent of that gain occurred in January. Over the last two months, North Carolina has essentially netted no new jobs.”

In April, North Carolina employers cut 1,300 more payroll jobs than they added (+/- 0 percent). Private sector payroll levels essentially held steady, (-1,200, +/- 0 percent), as was the case in the public sector (-100, +/- 0 percent). Within the private sector, manufacturing shed the most jobs, (-2,900, -0.7 percent), followed by information (-1,100, -1.6 percent) and other services (-900, -0.6 percent). Professional and business services netted the most jobs (+3,600, +0.7 percent), due mainly to hiring in the administrative and waste management subsector.

A positive revision to the March payroll data found that the state lost 500 fewer jobs than first reported (-800 versus -1,300). With that revision, North Carolina now has, on net, 218,600 fewer payroll positions (-5.2 percent) than it did in December 2007. Since bottoming out in February 2010, the state has netted an average of 4,142 payroll jobs per month, resulting in a cumulative gain of 107,700 positions (+2.8 percent).

“Over the past few years, North Carolina has managed to close some of the job gap caused by the recent recession,” noted Quinterno. “Since last July, the job gap has fallen by a full percentage point, yet compared to December 2007, North Carolina has fewer payroll jobs in every major private industry sector except for educational and health services and professional and business services. The improvements that have occurred have occurred very slowly.”

The household data for April also point to a labor market characterized by widespread joblessness. Last month saw a small increase in the number of employed individuals (+1,471, <0.1 percent) and a decline in the number of unemployed persons (-12,686, -2.8 percent). Yet the size of the labor force decreased by 11,215 individuals (-0.2 percent). It was this decline rather than an increase in employment that pushed the statewide unemployment rate down to 9.4 percent, the lowest level recorded in over three years.

To place the scale of unemployment in context, consider how there were almost twice as many unemployed North Carolinians in April 2012 as there were in December 2007. The statewide unemployment rate also was 4.4 percentage points greater than it was over four years ago. In fact, the monthly statewide unemployment rate has exceeded 10 percent in 35 of the last 40 months. Moreover, the share of the adult population with a job remains at a depressed level.

“While North Carolina’s job market began 2012 moving in a positive direction, it has failed to maintain that momentum,” observed Quinterno. “The state has experienced virtually no net job growth over the last two months. While the unemployment rate has fallen by half a percentage point since February, the decline is due largely to people leaving the labor force. Recovery remains a distant goal for jobless North Carolinians—a goal that still is being measured in terms of years.”

Picturing Energy Security

A new infographic prepared by the Congressional Budget Office rounds up useful information on energy security in the United States.

Around The Dial – May 17, 2012

Economic policy reports, blog postings, and media stories of interest:

• Matt Taibbi peaks behind the curtain of Goldman Sachs.
• Economix looks at “how older workers weather layoffs.”
• Martin Wolf wonders about the future of the United States.
• The NC Budget & Tax Center analyzes rates of employment growth.

NC Unemployment Claims: Week Of 4/28/12

For the benefit week ending on April 28, 2012,  some 9,979 North Carolinians filed initial claims for state unemployment insurance benefits and 98,099 individuals applied for state-funded continuing benefits. Compared to the prior week, there were fewer initial and fewer continuing claims. These figures come from data released by the U.S. Department of Labor.

Averaging new and continuing claims over a four-week period — a process that helps adjust for seasonal fluctuations and better illustrates trends — shows that an average of 10,667 initial claims were filed over the previous four weeks, along with an average of 101,717 continuing claims. Compared to the previous four-week period, the average number of initial claims was lower, and the average number of continuing claims was lower.

One year ago, the four-week average for initial claims stood at 11,698,  and the four-week average of continuing claims equaled 111,557.

In recent weeks covered employment has increased and now exceeds the level recorded a year ago (3.76 million versus 3.71 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were over four years ago.

The graph shows the changes in unemployment insurance claims measured as a share of covered employment in North Carolina since the recession’s start in December 2007. 

Both new and continuing claims appear to have peaked for this cycle, and the four-week averages of new and continuing claims have fallen considerably.  Yet continuing claims remain at an elevated level, which suggests that unemployed individuals are finding it difficult to find new positions.

Putting Unemployment Rates In Context

Mike Konczal of Rortybomb points out that the nation’s high, overall unemployment rate is at the same as the unemployment rate among African-American workers prior to the recession. Writes Konczal:

One interesting thing to note is that the number in between 8.7 percent and 8.5 percent, a threshold the country just crossed, was the average unemployment rate for African Americans going into the recession. The rate from 2006-2007 for African American men and women over 16 was 8.6 percent….
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Total African American unemployment is currently at 15.8 percent and has been hovering around 16 percent for three years now. All the other major employment health indicators are down as well. For instance, the employment-to-population ratio is down to 51 percent from 60 percent in 2001. Nearly half of all African Americans aren’t working.
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The economy is terrible for all Americans right now and we desperately need action to both expand the economy and repeal attempts to contract it. But it is worth remembering that the unemployment misery all Americans are experiencing right now is equal to what it was like during the best two years of the 21st century for African Americans.