South By North Strategies, Ltd.

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.”