RALEIGH (March 11, 2019) – Labor market data released today shows that North Carolina has seen a dip in job creation over the past several months. While the state continues to add jobs, the pace of growth over the past several months has been slower than at any time since 2011.
“We keep hearing that the economy is roaring along, but the data tell a decidedly different story.” said Patrick McHugh, Senior Policy Analyst with the Budget & Tax Center, a project of the NC Justice Center. “North Carolina has never gotten back to the level of employment that existed before the Great Recession, and, if the recent pace of growth persists, we won’t get there before the next recession comes along.”
A deeper examination of the labor market figures point to underlying economic challenges facing North Carolina:
- Job growth falters: After several years of posting job growth that usually exceeded the national rate, like most other Southeastern states, the last six months have seen a markedly slower rate of expansion. Employment in North Carolina expanded by 1.7 percent from January 2018 through January of this year, compared to 1.9 percent. After several years of posting annual employment rates above 2 percent, North Carolina has only hit that threshold in a few months since the start of 2017.
- Labor force participation slipping: While the labor market has certainly tightened over the past year, a lack of growth in labor force participation still signals that the economy isn’t firing on all cylinders. Labor force participation is the share of working-age people who have a job or are actively looking for work, so it provides a better picture of how many people are involved in the labor market than the headline unemployment rate. In January of 2019, 61.0 percent of working age people were in the labor market, a slight decline from the 61.4 rate from January of 2018. Labor force participation generally increases when the economy is doing well and unemployment is low, so this decline is a worrying signal.
- Share of North Carolinians with a job still below pre-recession levels: North Carolina still has not recovered to the level of employment that existed before the Great Recession. The headline unemployment rate remains below 4 percent, but that statistic does not tell the whole story about the share of North Carolinians who are working. In December of 2007, just before the onset of the Great Recession, 62.1 percent of North Carolinians had a job, a level of employment that had been the norm throughout the early 2000’s. In January of this year however, only 58.6 percent of North Carolinians were employed, virtually identical to where we stood at the beginning of 2017. If the economy were fully healthy, we should expect a larger share of North Carolinians to be working.
- Bureau of Labor Statistics revises several years of labor market data: As it does at the beginning of each year, the Bureau of Labor Statistics revises labor market data for previous years based on new modeling. We will analyze the newly released data and identify any meaningful departures from previously released information later this week.
For more context on the economic choices facing North Carolina, check out the Budget & Tax Center’s weekly Prosperity Watch report.
For labor market charts and data, check out the Budget & Tax Center’s Labor Market page.
FOR MORE INFORMATION, CONTACT Patrick McHugh, Budget & Tax Center Senior Policy Analyst at firstname.lastname@example.org or 919-856-2183.