Prosperity Watch Issue 23, No. 1: North Carolina's job creation continues to lag, despite modest gains
Recently released unemployment numbers from the N.C. Division of Employment Security have reinforced what many of the state’s workers already know first-hand—North Carolina’s labor market is continuing to struggle. At the same time, however, the state has seen modest—but real—gains in comparison to the rest of the nation over the course of 2012.
According to the latest Local Area Unemployment Statistics release, the national unemployment rate has improved significantly over the last year, dropping from 8.3 in January 2012 to 7.7 percent a year later, while North Carolina’s labor market has seemed relatively stagnant over the same period. For example, the state’s jobless rate currently stands at 9.5 percent in January and hasn’t dropped below 9.4 percent in the last year. Likewise, the percentage of North Carolina’s population currently employed (a measure also known as the employment-to-population ratio, which tends to be more accurate than the unemployment rate because it accounts for unemployed workers who have dropped out of the labor force) has lagged behind the national rate since the beginning of the Great Recession in December 2007, as the following chart makes clear. In January, for example, 57.4 of North Carolina’s residents are employed, while 58.7 percent are employed in the nation as a whole. As a result, this lagging job creation is clearly the central challenge facing our state’s workers and policy makers.
At the same time, however, there has been some modest improvement in the state’s labor market over the past year, as employment levels have largely stabilized since the catastrophic job losses of the Great Recession. Perhaps most hopefully, North Carolina’s percentage of population currently employed has begun to slowly grow over the past six months, a trend that appears to be closing the gap with the rest of the nation. For example, the state’s current level of employment (57.4 percent)—while still uncomfortably low by historical standards—is the highest since March 2010. Even better, the difference between state and nation is shrinking, with the state’s employment levels just 1.2 percentage points lower than the national average for first time since February 2010.
Even with these improvements, however, North Carolina’s employment growth continues to struggle, and unemployed workers still outnumber available job openings by 3-to-1. Given this reality, job creation should be a top priority for the state’s policy makers.