South By North Strategies, Ltd.

NC Unemployment Rate Hits A Five-Year Low

CHAPEL HILL, NC (December 20, 2013) – In November, employers in North Carolina eliminated 6,500 more payroll positions than they added (-0.2 percent), due primarily to a net loss of 5,000 private-sector jobs. The monthly household survey, however, recorded a significant drop in the state’s unemployment rate to 7.4 percent, which was the lowest monthly figure logged since November 2008. While North Carolina’s unemployment rate fell sharply over the past year, most of the decline was attributable to a contraction in the size of the state’s labor force, which now has 95,009 fewer members (-2 percent) than it did a year ago.

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

“The November jobs report offered a muddled picture of the state’s labor market,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “On the one hand, employers reported having fewer positions on their payrolls than in October, but on the other hand, more people reported being employed.”

Between October and November, North Carolina businesses shed 6,500 more jobs than they added (-0.2 percent). Private-sector payrolls cut 5,000 more jobs than they gained (-0.1 percent), and public-sector payrolls lost -1,500 jobs (-0.2 percent). Within the private sector, the educational and health services sector lost the most jobs (-4,100, -0.7 percent), followed by the manufacturing (-3,300, -0.7 percent), finance (-2,500, -1.2 percent), and other services (-1,000, -0.7 percent) sectors. The trade, transportation, and utilities sector, meanwhile, netted the most jobs (+2,600, +0.3 percent), followed by the professional and business services (+2,000, +0.4 percent) and construction (+1,600, +1 percent) sectors.

A revision to the October payroll data found that the state gained 3,600 more jobs that month than first estimated (+25,800 versus +22,200). With that revision, North Carolina now has, on net, 83,900 fewer payroll positions (-2 percent) than it did in December 2007. Since bottoming out in February 2010, the state has netted an average of 5,420 payroll jobs per month, resulting in a cumulative gain of 243,900 positions (+6.4 percent). At that rate, all else equal, it would take until March 2015 for the state to have as many payroll jobs as it did at the end of 2007.

The household data recorded in November offered a somewhat more optimistic view of the state’s labor market. Last month, the statewide unemployment rate fell by 0.6 percentage points and reached 7.4 percent, which was the lowest rate recorded since November 2008, when the rate was 7.7 percent. Additionally, 20,037 more North Carolinians had jobs in November (+0.5 percent) than in October. At the same time, the size of the labor force fell slightly (-8,101, -0.2 percent) over the month and reached a level smaller than the one posted in August 2011.

When placed in a broader context, the household data reported in November offer evidence of an underperforming labor market. Between November 2012 and November 2013, the statewide unemployment rate fell by 2 percentage points, dropping to 7.4 percent from 9.4 percent. Yet the decline was attributable to people leaving the labor force rather than finding new positions. While 101,091 fewer North Carolinians were unemployed in November compared to a year earlier (-22.7 percent), just 6,082 more people were employed (+0.1 percent). The remaining 95,009 people left the labor force altogether (-2 percent).

Continued declines in two major measures of labor utilization provide additional evidence of an underperforming labor market. In August, the labor force participation rate dipped to 61.3 percent, which was the lowest monthly figure recorded at any point since 1976. In fact, the labor force participation rate has fallen every month since January. Although another important measure, the employment-to-population ratio, rose in November, the current ratio of 56.8 percent is still 0.5 percentage points below the level recorded a year ago and just 0.5 percentage points above the 37-year low of 56.3 percent posted in the summer of 2011.

November’s labor market report provided additional insight into the effects of the extensive changes to the state’s system of unemployment insurance compensation implemented over the summer. Between October 2013 and November 2013, the number of claimants receiving regular state-funded unemployment insurance compensation declined by 4.4 percent, falling to 58,432 from 61,125. Compared to a year earlier, 42,514 fewer claimants received regular state-funded insurance in November (-42.1 percent).

Also in November, the state paid a (nominal) total of $52.6 million in regular state-funded unemployment insurance compensation, an amount 44.4 percent lower than the (nominal) total of $94.7 million paid in November 2012.

“The significant drop in the state’s unemployment rate in November should not blind observers to three troubling realities,” observed Quinterno. “First, the decline in the unemployment rate masks the fact that sizable numbers of joblessness North Carolinians have left the labor market altogether. Second, while the monthly unemployment rate of 7.4 percent is the lowest one posted in five years, the rate remains extremely high; in fact, the current rate is 0.5 percentage points greater than the highest figure recorded during the 2001 recession. Lastly, jobless North Carolinians increasingly are being left to their own devices, as evidenced by the declines in unemployment insurance payments.”

NC Unemployment Claims: Week Of 11/30/13

For the benefit week ending on November 30, 2013, North Carolinians filed some 8,700 initial claims for state unemployment insurance benefits and 74,243 claims for state-funded continuing benefits. Compared to the prior week, there were more initial claims and more continuing claims. These figures come from data released by the US 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 6,619 initial claims were filed over the previous four weeks, along with an average of 71,629 continuing claims. Compared to the previous four-week period, the average number of initial claims was higher, and the average number of continuing claims was higher.

One year ago, the four-week average for initial claims stood at 14,089, and the four-week average of continuing claims equaled 102,195.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.85 million versus 3.78 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were almost six years ago.

The graph (below right) 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.  In fact, the four-week average of initial claims, when measured as a share of covered employment, is near the lowest level recorded since early 2008. The four-week average of continuing claims also has fallen to near the lowest level recorded since early 2008.

Note that the recent declines in new and continuing claims are not necessarily indicative of an improving labor market. State legislation that took effect on July 1, 2013, made major changes to insurance eligibility criteria, and the more stringent criteria eliminate claims that would have been valid prior to July 1. In time, this development also should reduce the number of continuing claims. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that eventually should lead to a reduction in the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (6,619) was 53 percent lower than the figure recorded one year ago (14,089), while the average number of continuing claims was 30.3 percent lower (71,629 versus 102,195). Given the relative lack of improvement in labor market condition in North Carolina over the past year, such declines likely are products of changes to unemployment insurance laws rather than improvements in underlying economic conditions.

NC Unemployment Claims: Week Of 11/23/13

For the benefit week ending on November 23, 2013, North Carolinians filed some 4,682 initial claims for state unemployment insurance benefits and 69,510 claims for state-funded continuing benefits. Compared to the prior week, there were fewer initial claims and fewer continuing claims. These figures come from data released by the US 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 6,223 initial claims were filed over the previous four weeks, along with an average of 70,826 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 14,047, and the four-week average of continuing claims equaled 100,824.

In recent months covered employment has increased and now exceeds the level recorded a year ago (3.85 million versus 3.78 million). Nevertheless, there are still fewer covered workers than there were in January 2008, which means that payrolls are smaller today than they were almost six years ago.

The graph (below right) 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.  In fact, the four-week average of initial claims, when measured as a share of covered employment, is again at the lowest level recorded since early 2008. The four-week average of continuing claims also has fallen to near the lowest level recorded since early 2008.

Note that the recent declines in new and continuing claims are not necessarily indicative of an improving labor market. State legislation that took effect on July 1, 2013, made major changes to insurance eligibility criteria, and the more stringent criteria eliminate claims that would have been valid prior to July 1. In time, this development also should reduce the number of continuing claims. Additionally, the legislation reduced the maximum number of weeks  of state-funded insurance for which a claimant is eligible — an action that eventually should lead to a reduction in the number of continuing claims.

To place the numbers in context, consider how the four-week average of initial claims (6,223) was 55.6 percent lower than the figure recorded one year ago (14,047), while the average number of continuing claims was  29.8 percent lower (70,826 versus 100,824). Given the relative lack of improvement in labor market condition in North Carolina over the past year, such declines likely are products of changes to unemployment insurance laws rather than improvements in underlying economic conditions.

Positive And Negative Trends In Nov. Jobs Report

CHAPEL HILL, NC (December 6, 2013) – The national labor market added in November 203,000 more jobs than it lost. While the unemployment rate and the number of unemployed persons fell over the month, a large portion of that decline was attributable of the return to work of furloughed federal.

Last month, 10.9 million Americans were unemployed, while 7.7 million individuals worked part time despite preferring full-time positions. Another 762,000 individuals (not seasonally adjusted) were so discouraged about their job prospects that they had stopped searching for work altogether.

“November marked the 38th-straight month of job growth recorded in the United States,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Over the past year, the national economy netted an average of 191,000 jobs per month, and the pace of growth has accelerated over the past three months. Nevertheless, the country is still 7.9 million jobs short of the number needed both to replace the jobs lost since 2007 and to accommodate the subsequent growth in the size of the labor force.”

In November, the nation’s employers added 203,000 more payroll positions than they cut. Gains occurred overwhelmingly in the private sector (+196,000), while government employers added 7,000 more positions than they eliminated, due to hiring by state and local governments. Furthermore, the payroll employment numbers for September and October underwent revisions; with the updates, the economy netted 375,000 jobs over those two months, not the 367,000 positions previously reported.

Within the private sector, payroll levels rose the most in the trade, transportation, and utilities sector (+60,000, with 37.2 percent of the gains occurring in the retail trade subsector), followed by the education and health services sector (+40,000, with 71 percent of the gain occurring in the health care field), the professional and business services sector (+35,000, with 42 percent of the gain occurring in the administrative and waste services subsector), and the manufacturing sector (+27,000). Payroll levels in all other major sectors either rose or were essentially unchanged from October.

“Since last November, the American economy has gained 2.3 million more payroll positions that it has lost,” noted Quinterno. “While the rate of growth has accelerated in recent months, the average monthly rate of job growth over the past year—some 191,000 positions per month—not close the nation’s sizable jobs gap anytime soon.”

Labor market conditions as measured by the household survey also improved in November, although the return to work of furloughed federal employees influenced the results. Last month, 10.9 million Americans (7 percent of the labor force) were jobless and seeking work. Both the unemployment rate and the total number of unemployed persons were lower than in the prior month. In November, the share of the population participating in the labor force essentially was unchanged at 63 percent, a rate lower than the one posted a year ago.

On a positive note, more Americans were working in November compared to a year earlier, and fewer persons were unemployed. At the same time, the share of the working-age population with a job (58.6 percent) remained near the lowest figure recorded during the current business cycle.

Last month, the unemployment rate was higher among adult male workers than female ones (6.7 percent versus 6.2 percent). Unemployment rates were higher among Black (12.5 percent) and Hispanic workers (8.7 percent) than among white ones (6.2 percent). The unemployment rate among teenagers was 20.8 percent. Moreover, 6.7 percent of all veterans were unemployed, and the rate among recent veterans (served after September 2001) was 9.9 percent. At the same time, 12.3 percent of Americans with disabilities were jobless and seeking work (not seasonally adjusted).

Jobs remained comparatively hard to find in November. Last month, the underemployment rate equaled 13.2 percent, down from the 14.4 percent rate logged a year ago. Not only were 10.9 million Americans unemployed, but 7.7 million individuals worked part-time jobs despite preferring full-time work. Another 762,000 individuals (not seasonally adjusted) were so discouraged about the labor market that they had stopped searching for work.

Among unemployed workers, 37.3 percent had been jobless for at least six months, and the average spell of unemployment equaled 37.2 weeks.

In November, the leading cause of unemployment remained a job loss or the completion of a temporary job, which was the reason cited by 53.1 percent of unemployed persons. Another 28.1 percent of unemployed persons were re-entrants to the labor market, while 10.6 percent were new entrants. Voluntary job leavers accounted for the remaining 8.2 percent of the total.

“The November employment report points to a labor market that is improving in some crucial aspects yet underperforming in others,” observed Quinterno. “Last month, job growth accelerated and underemployment fell. Nevertheless, the American economy still is not generating enough jobs for all those who want and need work, and a tremendous amount of potential labor is going unused. The United States’ jobs crisis remains far from over. ”

Drops In Unemployment Mask Weak Conditions

CHAPEL HILL, NC (December 5, 2013) – Between October 2012 and October 2013, unemployment rates fell in all 100 of North Carolina’s counties and in all 14 of the state’s metropolitan areas. Yet over the same period, the size of the labor force decreased in 91 counties and in 14 metro areas.

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

“Unemployment rates across much of North Carolina have moved steadily downward over the past year,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “In many communities, unemployment rates are at the lowest levels recorded since the ‘Great Recession’ began in late 2007. Local unemployment rates nevertheless remain elevated, with 98 counties and 14 metro areas posting unemployment rates greater than those recorded at the end of 2007.”

Compared to December 2007, which is when the national economy fell into recession, North Carolina now has 1.9 percent fewer jobs (-81,000). In October, the state gained 22,200 more jobs than it lost (+ 0.5 percent). Since bottoming out in February 2010, the state’s labor market has netted some 5,609 jobs per month, resulting in a cumulative gain of 246,800 positions (+6.4 percent).

Between August 2013 and October 2013, local unemployment rates decreased in 91 of the state’s 100 counties, rose in eight counties, and held steady in one county. Individual county rates in October ranged from 4.7 percent in Chatham County to 14.4 percent in Scotland County. Overall, 12 counties posted unemployment rates greater than or equal to 10 percent, and 66 counties posted rates between 7 and 9.9 percent.

“Non-metropolitan labor markets still are struggling relative to metropolitan ones,” noted Quinterno. “In October, 8.4 percent of the non-metro labor force was unemployed, compared to 7.2 percent of the metro labor force. Compared to December 2007, the non-metro labor force now has 5 percent fewer employed persons, while the number of unemployed individuals is 48.7 percent larger.”

Between August and October, unemployment rates fell in all 14 of the state’s metro areas. Rocky Mount had the highest October unemployment rate (10.9 percent), followed by Fayetteville (8.9 percent) and Hickory-Morganton-Lenoir (8.3 percent). Asheville had the lowest unemployment rate (5.6 percent), followed by Durham-Chapel Hill (5.7 percent) and Raleigh-Cary (6 percent).

Compared to October 2012, unemployment rates in October 2013 were lower in all 100 counties and all 14 metro areas. Over the year, however, labor force sizes decreased in 91 counties and in 14 metros. In fact, the statewide labor force was 2 percent smaller (-96,972 individuals) in October 2013 than it was in October 2012.

Among metros, Rocky Mount’s labor force contracted at the greatest rate (-4.5 percent), followed by Hickory-Morganton-Lenoir (-3.8 percent) and Greenville (-3.2 percent). With those changes, metro areas now are home to 71.9 percent of the state’s labor force, with 50.7 percent of the labor force residing in the Triangle, Triad, and Charlotte metros.

In the long term, improvements in overall labor market conditions depend on growth in the Charlotte, Research Triangle, and Piedmont Triad regions. Yet growth in these metros remains muted. Collectively, employment in the three metro regions has risen by 4.4 percent since December 2007, and the combined October unemployment rate in the three regions equaled 6.9 percent. That was down from the 8.4 percent rate recorded one year ago yet was above the 6.4 percent rate recorded in October 2008. Of the three broad regions, the Research Triangle had the lowest October unemployment rate (6.1 percent), followed by the Piedmont Triad and Charlotte (7.6 percent in both regions).

The local employment report for October also provides insights into the effects of the extensive changes to the state’s system of unemployment insurance implemented over the summer. Last month, the number of regular unemployment insurance initial claims filed in North Carolina totaled 29,142, down from the 59,118 initial claims filed a year earlier (-50.7 percent). Mecklenburg County was home to greatest number of regular initial claims (3,068), followed by Wake (2,252), Guilford (1,550), Cumberland (1,035), and Forsyth (858) counties.

In October 2013, North Carolinians received a (nominal) total of $63.8 million in regular state-funded and federal unemployment insurance compensation, down from the (nominal) $216.3 million received in October 2012. This sharp decline (-70.5 percent) is attributable to a mix of factors, such as drops in the number of insurance claims resulting from economic improvements and legal changes to eligibility criteria.

Additionally, the state’s decision to exit the federal Emergency Unemployment Compensation (EUC) program reduced the amount of federal unemployment insurance compensation flowing into the state in October. Between October 20102 and October 2013, the amount of federal unemployment insurance benefits paid to North Carolinians fell by 96.8 percent, dropping to a (nominal) total of $3.6 million from a (nominal) total of $113.7 million.

“Despite recent drops in local unemployment rates, labor market conditions remain weak across much of North Carolina,” said Quinterno. “The declines in local unemployment rates actually are masking a number of alarming developments—developments that point to an under-performing economy that is crying out for attention from state and federal policymakers.”