Triad’s jobless rate changes course, increases to seven percent
The Triad’s jobless rate reversed course during January, rising 0.4 percentage points to 7 percent, the N.C. Commerce Department reported today.
It is the first time in seven months that the Triad rate has increased. The unemployment rate also rose in the state’s other four major metro area by a similar level.
However, the Triad rate remains well below the 10.3 percent level of January 2013. The December rate of 6.6 percent represented the lowest level in 5½ years.
The rate for the Winston-Salem metropolitan statistical area jumped from 6.1 percent to 6.5 percent over the month. The MSA consists currently of Davie, Forsyth, Stokes and Yadkin counties. Davidson County was crafted into the MSA by a federal agency in March 2013, but its employment data has yet to be factored into the region.
Forsyth’s rate also moved from 6.1 percent to 6.5 percent.
All 14 counties in the Triad and Northwest North Carolina experienced a rate increase, with the largest being Alleghany, which went from 7.1 percent to 8.8 percent.
It is not clear whether an annual benchmark recalculation of state employment data, required to meet federal guidelines, played a role in the January rate increases. The benchmark is a monthly population survey by the U.S. Bureau of Labor Statistics to determine the national unemployment rate.
What is clear is that all 14 of the state’s metro areas had at least 1.1 percent decline in employment from December to January. Those monthly workforce data come from an employer survey that is not seasonally adjusted.
Commerce officials and economists say year-over-year comparisons provide a more accurate assessment of the employment picture because it eliminates some of the seasonality.
In that case, it’s clear that the Triad continues to fall further behind the Charlotte and Raleigh economies.
The Charlotte-Gastonia-Rock Hill, S.C., MSA created 24,800 jobs year over year, while the Raleigh-Cary MSA created 17,800.
By comparison, the Winston-Salem MSA had a net gain of just 1,200 jobs, while Greensboro-High Point MSA had a net gain of 2,300 jobs.
When comparing December to January employment data, the Winston-Salem MSA had a loss of 4,900 jobs, or 2.3 percent. There was a decline in jobs in all 10 private-sector categories listed by Commerce, led by 1,900 in professional and business services and 1,300 in trade, transportation and utilities, as well as in government.
Economists say it’s not that the region actually lost that many jobs, but rather the workforce totals may have been overestimated in previous months.
The Greensboro-High Point MSA, consisting of Guilford, Randolph and Rockingham counties, lost 7,600 jobs over the month, led by 2,300 in trade, transportation and utilities, 1,400 in education and health services, and 1,200 each in professional and business services, and leisure and hospitality.
Another factor affecting the Forsyth jobless rate was an increase of 1,795 people into the workforce during January for a total of 176,785. There also were 823 more Forsyth residents listed as unemployed, to 11,576, compared with December.
When people stop looking for work, they are no longer considered unemployed for the purpose of calculating the jobless rate.
“This has been a tale of two recoveries,” said Michael Walden, an economics professor at N.C. State University. “Jobs have been created – although not as fast as we’d like – for those with skills employers want.
“But a significant number of workers have stopped looking for work due to a skill mismatch – not having the skills and training for today’s labor market,” Walden said.
“If these folks drop out of the labor force, they make the jobless rate look better than it is.
“We had some folks re-enter the workforce and look for work in January – thereby being classified as unemployed,” Walden said. “If the jobless rate rises for this reason, it is not bad.”
Economists say it might take a year or more to determine whether actions taken by the General Assembly, signed into law by Gov. Pat McCrory and put into effect July 1, will improve the state’s job market.
That has not stopped McCrory and Republican legislators from touting the rate drop since July 1 as signs of a “Carolina comeback.”
They claim that a tough-love approach that included reducing weekly jobless benefits in terms of maximum amount and number of weeks have made individuals more willing to take available jobs, including at lower wages and potentially below their skill level, as their benefits run out.
“We are proud to see the results of the fiscally conservative, pro-business policies that the General Assembly enacted over the past three years help North Carolina’s economy gain momentum,” House Speaker Thom Tillis, R-Mecklenburg, and Senate President pro tem Phil Berger, R-Rockingham, said in a joint statement Monday.
John Quinterno, a principal with research firm South by North Strategies Ltd., said he considers that “labor market conditions in North Carolina as a whole, and in many individual communities, remain far from healthy.”
Taking the Winston-Salem MSA as an example, the region’s jobless rate dropped 3.3 percentage points despite gaining just 1,200 jobs year over year.
“The unemployment rate dropped primarily because the overall labor force shed 7,212 people,” Quinterno said.
“If you added back all 7,212 people as being unemployed, the rate would be 9.2 percent.”