NC’s labor market improved incrementally

In May, employers in North Carolina added 10,400 more jobs than they cut, with net gains occurring in the public and private sectors. Over the year, North Carolina gained 108,800 more jobs than it lost, due entirely to gains in the private sector. Although the statewide unemployment rate rose to 5.7 percent in May, the rate still was 0.6 percentage points lower than had been the case a year earlier.

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

“Through the first five months of 2015, North Carolina gained 40,100 more payroll jobs than it lost,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “For comparison, the corresponding figure in 2014 was a gain of 41,500 jobs. Even with the payroll gains logged over the last few years, North Carolina now has just 75,200 more jobs, or 1.8 percent more jobs, than it did at the end of 2007.”

Between April 2015 and May 2015, North Carolina employers added 10,400 more jobs than they cut (+0.2 percent). Private-sector payrolls gained, on net, 8,900 positions (+0.3 percent), and public-sector payrolls added, on net, 1,500 jobs (+0.2 percent), due to net hiring by local governments. Within private industry, the education and health care services sector added the most payroll jobs (+2,800, +0.5 percent), followed by the construction (+2,400, +1.3 percent) and leisure and hospitality services sector (+2,300, +0.5 percent). Overall, payroll levels rose in every major private industry sector except for the trade, transportation, and utilities sector (-3,700, -0.5 percent).

A revision to the April payroll data found that the state gained more jobs than first reported (+12,400 versus an original estimate of +11,100 jobs). With that revision, North Carolina now has, on net, 75,200 more payroll positions (+1.8 percent) than it did in December 2007. Since bottoming out in February 2010, the state’s labor market has netted an average of 6,400 payroll jobs per month, resulting in a cumulative gain of 402,000 positions (+10.5 percent).

Over the year, North Carolina employers added 108,800 more jobs than they cut (+2.6 percent). Private-sector payrolls gained, on net, 109,400 positions (+3.2 percent), while public-sector payrolls lost, on net, 600 jobs (-0.1 percent). Within private industry, every major industrial sector netted payroll jobs, with the professional and business services sector gaining the most positions (+23,200 or +4.1 percent, with 52 percent of the gain occurring in the administrative and waste management services subsector).

“The steady payroll growth experienced recently in North Carolina has not closed the state’s job gap, a gap that may be as high as 418,000 jobs,” noted Quinterno. “North Carolina indeed has slightly more jobs than it did when the recession started, but the state’s labor market remains well short of a full recovery.”

According to the monthly household data, the statewide unemployment rate rose in May to 5.7 percent. Last month’s rise in the unemployment rate was attributable in large part to an increase in the size of the labor force (+29,396 persons, +0.6 percent). Over the month, the number of employed North Carolinians increased by 16,769 persons (+0.4 percent), and the number of unemployed persons rose by 12,627 individuals (+4.9 percent).

Over the past year, the statewide unemployment rate fell by 0.6 percentage points, dropping to 5.7 percent from 6.3 percent, with the number of unemployed North Carolinians decreasing by 19,275 persons (-6.6 percent). During that same period, the number of employed persons rose by 158,939 individuals (+3.7 percent), while the size of the labor force increased by 139,664 persons (+3 percent). This suggests that the labor market managed to accommodate new members of the labor force and move some unemployed persons into jobs.

Other improvements recorded over the course of the year include a rise in the share of working-age North Carolinians participating in the labor market (to 61.4 percent from 60.3 percent) and in the share of working-age North Carolinians who are employed (to 57.9 percent from 56.5 percent). Although both of these measures have increased recently, they remain not too far above the lowest monthly rates recorded at any point since January 1976.

Between May 2014 and May 2015, the number of claimants of regular state-funded insurance fell by 14.9 percent, dropping to 19,822 from 23,306. Also in May 2015, the state paid a (nominal) total of $23.2 million in regular state-funded unemployment insurance compensation, an amount 34.5 percent lower than the (nominal) total of $35.4 million paid in May 2014.

“North Carolina’s labor market has improved in many ways over the past year, but those improvements have come slowly,” said Quinterno. “North Carolina has managed to add enough jobs to keep pace with the growth in the size of the labor force and to close some of the sizable job gap that was created during the recession, but the pace of growth has not accelerated radically. Incremental progress, at best, remains the troubling norm in North Carolina.”

John Quinterno is a principal consultant for South by North Strategies , Ltd., a research consultancy specializing in economic and social policy.

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