JOHN QUINTERNO: A mixed performance for North Carolina's labor market
Tuesday, Aug. 23, 2016: North Carolina's labor market conditions are still not strong enough to accommodate all those who want and need work. Such sub-par conditions are incapable of generating meaningful improvements in wages, incomes, and household living standards.Posted — Updated
In July, employers in North Carolina added 12,000 more payroll jobs than they cut, with net gains occurring in the private and public sectors. So far in 2016, North Carolina has netted 65,600 payroll jobs, due primarily to private-sector growth. The statewide unemployment rate of 4.7 in July was one percentage point lower than it was a year ago, as well as the lowest monthly rate recorded since mid-2007.
These findings come from data released last week by the Labor and Economic Analysis Division of the North Carolina Department of Commerce.
The job growth experienced so far in North Carolina in 2016 is consistent with the slow recovery underway since early 2010. The recovery has yet to reverse the severe economic damage inflicted during the recession.
From June to July 2016, North Carolina employers added 12,000 more jobs than they cut (+0.3 percent). Private-sector payrolls added, on net, 6,800 positions (+0.2 percent), with public sector payrolls growing by 5,200 positions (+0.7 percent). Within private industry, the professional and business services sector gained, on net, the most payroll jobs (+3,300, +0.5 percent), followed by the financial activities sector (+2,600, +1.2 percent) and the construction sector (+1,900, +1 percent). The manufacturing sector, meanwhile, cut, on net, 1,700 jobs (-0.4 percent), followed by the trade transportation, and utilities sector (-1,500, -0.2 percent).
A revision to the June payroll data found that the state netted fewer jobs than first estimated (+18,800 versus +19,400). With that revision, North Carolina now has, on net, 172,800 more payroll positions (+4.2 percent) than it did in December 2007. Since bottoming out in February 2010, the state’s labor market has netted an average of 6,500 payroll jobs per month, resulting in a cumulative gain of 499,400 positions (+13 percent).
Over the year, North Carolina employers added 94,100 more jobs than they cut (+2.2 percent). Private-sector payrolls gained, on net, 79,200 positions (+2.2 percent), while public-sector payrolls added, on net, 14,900 jobs (+2.1 percent). Within private industry, the professional and business services sector netted the most jobs (+28,600, +4.8 percent), followed by the trade, transportation, and utilities sector (+20,700, +2.6 percent) and the leisure and hospitality services sector (+9,500, +2.1 percent) sector.
The slow-but-steady payroll growth experienced in North Carolina since 2010 still has not yet closed the state’s sizable job gap. North Carolina indeed has more jobs than it did when the recession started, but it still has far fewer jobs than it should have given the growth in the state’s working-age population that has occurred.
The monthly household data for July offered a more negative view of the labor market. The statewide unemployment rate of 4.7 percent was down from the 4.9 percent rate in June. The July rate of 4.7 percent also was the lowest monthly rate logged since June 2007.
Much of the decline in the statewide unemployment rate between June and July, however, was due to a reduction in the size of the labor force by 26,156 persons (-0.5 percent). Between June and July, the number of employed North Carolinians actually fell by 13,203 persons (-0.3 percent), and the number of unemployed persons fell by 12,953 persons (-5.4 percent). Had all of those persons been considered unemployed, the unemployment rate would have been 5.2 percent.
The contraction in the size of the labor force further was reflected in a 0.4 percentage point decline in the share of working-age North Carolinians participating in the labor market to 61.1 percent from 61.5 percent. That was the lowest rate recorded since last January, as well as one that was just 0.4 percentage points above the lowest monthly rate logged at any point since January 1976.
North Carolina’s labor market has improved noticeably since the worst part of the ‘Great Recession,’ but conditions still not are strong enough to accommodate all those who want and need work. Such subpar labor market conditions are incapable of generating meaningful improvements in wages, incomes, and household living standards.
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