Labor Market Conditions in North Carolina Changed Little in September
On the surface, labor markets were relatively unchanged in North Carolina during September as underlying conditions remained soft. Total payroll employment was up slightly, while the unemployment rate edged down but remained elevated. In both instances, however, minor improvements were welcome. Looking beyond September, our Carolinas Survey of Business Activity suggests that the region's labor demand remained generally weak in October as its economic expansion moderated.
According to the N.C. Division of Employment Security, the state's payrolls edged up by 100 jobs in September following a modest increase the prior month. Still, despite the recent gains, employment in the Tar Heel state was approximately 7,000 jobs shy of the level attained back in February. The improvement in September was held back by continuing challenges faced by the public sector. Government employment fell by 1,400 jobs, mostly at the state and federal levels. Local government employment actually increased during the month.
Private sector employment was up by 1,500 in September, although the gains were spotty. On the service-providing side, the important professional and business services sector added roughly 6,000 jobs during the month and employment in that industry was up by nearly 16,000 over the year. Moreover, the sector's 3.1 percent growth rate far exceeded the state’s economy-wide average. Leisure and hospitality employment increased by 2,200 in September — the fourth increase in as many months — while private education and health services firms added 800 net new jobs. Job losses on the service-providing side occurred mostly in the financial services area, where 3,600 jobs were lost, and the trade, transportation, and utilities segment, in which 3,000 jobs were lost in September. The latter industry segment is the state's largest in terms of employment. On the goods producing side, employment was basically flat as an increase of 1,400 construction jobs was offset by a decline of 1,500 in manufacturing. One must be careful not to read too much into the construction number, as that industry's employment was down in seven of the prior eight months and remained considerably lower than a year ago.
Broken down regionally, payroll employment gains were just as spotty as the industry breakouts. Six of the 13 metropolitan statistical areas (MSAs) saw employment increase during September, with the Greensboro-High Point area heading up the pack with 3,000 net new jobs. Seven MSAs lost jobs from the prior month, most notably the Charlotte region, where nearly 4,000 net job losses occurred.
North Carolina's seasonally adjusted unemployment rate edged down to 9.6 percent in September from 9.7 percent in August, but was still two-tenths higher than the second quarter average. Meanwhile, our Carolinas Business Activity Index dipped from September to October, although it remained positive, suggesting that the region’s economy was expanding at a more modest pace. Despite the apparent expansion, survey responses suggest that firms remained cautious when it came to staffing decisions. Both labor demand indicators were virtually unchanged in October at levels suggestive of no change in aggregate labor inputs (workers or hours).