COVID-19 maintains its grip on North Carolina’s economy through May

RALEIGH (June 19, 2020) — A modest uptick in employment during May still left North Carolina in a deep economic crisis. More than a million North Carolinians have filed unemployment insurance claims since March 15, and most of the jobs lost have not been recovered.

“A lot of people got excited when the national unemployment rate dipped in May, but it was always grossly premature to declare the crisis over,” said Patrick McHugh, Research Manager with the North Carolina Budget & Tax Center. “Sober economists expect recovery from the COVID-19 pandemic to be a long haul, particularly if the federal and state governments don’t do much more to help people who have lost their livelihoods to this pandemic.”

Economic challenges facing North Carolina include:

• North Carolina still more than half a million jobs below pre-COVID19 levels: Even after factoring in the jobs added in May, there are still nearly 550,000 fewer jobs in North Carolina than there were in February before the pandemic started.
• Number of North Carolinians looking for work continues to climb: The number of people looking for work in North Carolina continues to increase, moving past 620,000, which is more than three times greater than how many people were looking for work before the outbreak of COVID-19.

• Unemployment claims show even wider harm than employment figures released to date: More than 1 million North Carolinians have filed Unemployment Insurance claims since March 15, when the COVID-19 outbreak began causing major job losses in North Carolina.
• Recession starting to undermine public services: As the recession starts to undermine state and local revenues, public servants are now starting to lose their livelihoods. Total government employment has dropped by more than 60,000 since February. The majority of those losses (46,500) have come at the local level, undermining the ability of local communities to maintain vital services during this pandemic.
• Headline unemployment rate already higher than the worst of the Great Recession, and even that doesn’t fully show how bad things are: The headline unemployment rate remained near 13 percent in May, still higher than the worst rate reached during the Great Recession. As bad as that is, it doesn’t fully reveal extent of the economic harm. The headline rate only captures people who are actively looking for work, so it won’t reveal the true extent of job and income losses for North Carolina families. Particularly during an event like this, when many people are being furloughed from work, are caring for children or other family members, or aren’t looking for work simply because there are no jobs to be found, the headline unemployment rate only reveals the tip of the iceberg.

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The Budget and Tax Center conducts non-partisan analysis of state budget and tax policy and monitors economic conditions in the state. We produce timely and accessible research that contributes to policy discussions and public debate, with the goal of building a broader understanding of the role of policy in supporting economic opportunity for all.

FOR MORE INFORMATION, CONTACT Patrick McHugh, Budget & Tax Center Research Manager, at Patrick.McHugh@ncjustice.org or 919-856-2183.