NC’s economy looks more resilient than the nation’s

As North Carolina heads into the fall, economic data are moving in a consistent direction: the Old North State appears to be holding up better than the nation overall. Unemployment is lower, payrolls are growing faster, and new federal data show Charlotte and Raleigh posting some of the strongest employment gains among major metropolitan areas. North Carolina is not immune from a cooling national economy, but it continues to show notable resilience.

Taken together, the latest federal and state employment reports offer a useful snapshot of how North Carolina is performing relative to the nation.

North Carolina’s seasonally adjusted unemployment rate fell to 3.5% in August, compared with 4.1% nationally. The state added 10,000 payroll jobs in August and 65,600 over the past year, including 61,000 private-sector jobs. The Bureau of Labor Statistics reports that North Carolina had the third-largest numerical payroll increase among the states over the year, behind only Texas and California.

The national labor market, meanwhile, is sending a more subdued signal. Employers added just 29,000 jobs in September, while the unemployment rate stood at 4.2%. Revisions also reduced previously reported job growth for July and August by a combined 60,000 jobs. Over the previous 12 months, employers added an average of 45,000 jobs per month.

North Carolina’s relative strength is also visible in its largest metropolitan areas. Charlotte-Concord-Gastonia added 21,400 payroll jobs over the past year, the third-largest numerical gain among metropolitan areas nationwide. Raleigh-Cary recorded a 2.2% increase in employment, the second-fastest rate among metropolitan areas with populations of at least 1 million.

Why might North Carolina be proving more resilient?

One clue is that people keep choosing to move here. North Carolina gained about 84,000 residents through net domestic migration between July 2024 and July 2025, the largest gain of any state. That is not simply population growth happening on its own. People move for jobs, education, affordability, family, retirement, and quality of life. The state’s demographers point specifically to a diverse economy, educational opportunities, and a lower cost of living than many major metropolitan areas as reasons North Carolina continues to attract younger adults.

Those new residents then add to the economy that attracted them in the first place. North Carolina added 145,907 residents overall during that year, increasing demand for housing, services, and infrastructure. Construction added 17,500 jobs over the past year, professional and business services added 23,300, leisure and hospitality gained 16,900, and private education and health services added 11,200.

With North Carolina’s population growing by nearly 146,000 people in a single year, there is plenty to build, from housing and roads to commercial space and industrial facilities. If construction hiring remains strong, it would signal that North Carolina is not simply absorbing growth, but making room for more of it.

That helps explain some of North Carolina’s current strength. The state’s fiscal position may matter even more if the national slowdown deepens.

Since 2013, the top individual income tax rate has fallen from 7.75% to a flat 3.99%, and the corporate rate is now 2%. Even with those lower rates, General Fund tax collections rose 3.46% last year, while appropriation expenditures increased just 0.8%. The Savings Reserve stood at about $3.8 billion at year’s end. If revenues weaken, that reserve gives lawmakers options they would not have if the state were already running close to the edge.

The state’s relative strength also predates this summer. North Carolina’s real GDP grew 16.5% from 2019 through 2024, compared with 12.5% nationally. Tax policy alone cannot explain that performance, but the latest employment numbers fit a pattern of North Carolina outperforming the national economy over several years.

There are important cautions.

Most notably, North Carolina lost 8,900 manufacturing jobs over the past year and 4,300 information jobs. Manufacturing deserves particular attention because it accounted for roughly 9.5% of North Carolina employment in 2024 and remains especially important outside the largest metropolitan areas. Continued manufacturing losses could eventually become a larger drag on the state economy.

The household employment numbers also complicate the story. While the payroll survey shows job growth, a separate BLS survey of households shows that the number of employed North Carolinians fell by 47,152 over the past year, while the number classified as unemployed fell by 22,422. The two surveys measure employment differently, but taken together, the household figures suggest a shrinking labor force and are an important reason not to treat the 3.5% unemployment rate as a complete measure of economic health.

This is not an economic boom, and North Carolina will not escape a national downturn if one comes. Manufacturing is already weakening, and the labor force decline deserves attention.

But if the national economy slows further, the question is how well states are prepared to absorb it. North Carolina is still adding payroll jobs, its largest metropolitan areas are growing, and the state finished the fiscal year with nearly $3.8 billion in reserve. That does not make North Carolina immune from a downturn. But it leaves the state well positioned to weather the storm if a broader national downturn develops.