Gap widens between N.C. and U.S. jobless rates
Published September 21, 2015
by Richard Craver, Winston-Salem Journal, September 18, 2015.
The gap between the state and national jobless rates widened again during August, with the state rate now at nearly a full percentage point higher.
The N.C. Commerce Department reported Friday the state’s rate was 5.9 percent, unchanged from July and down from 6 percent in August 2014.
Meanwhile, the U.S. rate dropped 0.2 percentage points to 5.1 percent. It was at 6.1 percent in August 2014.
Economists and analysts say year-over-year comparisons tend to provide a better evaluation of the job market and economy.
To put the gap into perspective, the N.C. rate was lower than the U.S. rate as recently as March (5.4 percent to 5.5 percent). It had been lower for all but one month between August 2014 and March.
What makes that important is that some economists say much of North Carolina’s slow economic recovery the past two years has come from piggybacking on the U.S. recovery.
Mekael Teshome, an economist with PNC Financial Services Group, said he is not worried that the gap is increasing.
“The increase in North Carolina’s jobless rate is due to large gains in the labor force,” Teshome said. The state’s labor force is up 116,968 year over year, with 121,391 more employed and 5,607 more counted as unemployed.
Teshome said the labor increase “is a good thing as it is a sign that job-seekers are increasingly confident in the state’s labor market recovery and are willing to jump in and look for work.”
Still, the higher N.C. rate appears to provide more evidence that the N.C. recovery has hit a ceiling.
The household survey and the employer payroll survey for August again provided a divergent monthly job-market outlook, as it has for most of the past three years.
The employer payroll data showed a net gain of just 4,300 private-sector jobs and a loss of 3,600 government positions from July to August.
The household study showed the labor force declined by 6,804. There were 8,844 fewer North Carolinians listed as employed, while the unemployed ranks rose by 2,040.
In both instances, the data does not distinguish how many workers are full-time, temporary or part-time, or how many jobs people are working.
Michael Walden, an economics professor at N.C. State University, said he tends to prefer the employer payroll data as the more relevant measuring stick because “it is based on a much larger sample.”
Since August 2014, the state has had a net gain of 112,000 private-sector jobs and a loss of 4,800 government jobs. Some of the government job gains may have been tied to new fiscal years for local and state entities.
Construction led the net job gains from July to August at 2,700, followed by 2,200 in leisure and hospitality, 1,600 in manufacturing and 1,300 in financial activities.
There was a loss of 2,900 jobs in education and health services, and 1,300 in other services.
“North Carolina’s economic recovery has hit roadblocks and detours in 2015,” said Patrick McHugh, policy analyst with the N.C. Budget & Tax Center.
“The number of unemployed in the state is growing, wages are falling and job growth is stalling. Without creating enough jobs at wages that can support North Carolina’s families’ spending in local economies, the economic recovery will be difficult to sustain.”
The rising state rate could have a silver lining for future applicants of state unemployment insurance (UI) benefits in that if the jobless rate for July through September averages between 5.6 percent and 6 percent, the minimum number of weeks would rise from 12 to 13 in early January.
The traditional jobless rate does not include several categories of individuals, including those who have stopped looking for work or are underemployed. A rate compiled by the U.S. Bureau of Labor Statistics, the U6 index, includes those categories.
The U6 index rate for North Carolina was 11.6 percent on June 30, compared with 10.3 percent nationally on Aug. 31.
McHugh said August employment data showed 57.6 percent of North Carolinians were employed. In the mid-2000s, employment levels reached a peak of about 63 percent.
“The percent of North Carolinians with a job remains below the national average, as it has been since the Great Recession,” McHugh said.
September 21, 2015 at 11:39 am
Richard L Bunce says:
This is the informative number along with working age population growth. Unemployment numbers filled with issues around counting who is not working, not looking for work, etc. Just slowing down the increase in Federal, State, and Local government regulations and taxes is not enough... must reduce them and free everyone to be employed, especially by themselves.
