North Carolina's Employment Increased and Unemployment Fell During October
The labor market picture in North Carolina improved materially in October as payroll employment increased for the third straight month and unemployment fell to its lowest level in more than three years. Meanwhile, our Carolinas Survey of Business Activity suggested that the region's modest economic expansion continued in November, although the pace of hiring was slow.
On the jobs front, payroll employment in North Carolina increased by 8,000 on a seasonally adjusted basis in October. It was the third monthly increase in payroll jobs in as many months, and left employment in the Tar Heel State at a new cyclical high, surpassing the previous best established in February. Still, North Carolina's economy has generated only about 114,000 net new jobs during the recovery after more than 333,000 were lost during the downturn, and the pace of recovery lags the national average by a considerable margin.
Many of the new jobs in October were created in goods-producing sectors. Factory employment, which has been up and down all year, was up by about 2,600 jobs in October. However, the gain only erased a little more than half of the positions the industry shed during August and September. Over the past 12 months, manufacturing employment was up by 5,000 positions. North Carolina's hard-hit construction industry saw an increase of 1,800 jobs in October, following a gain of 1,000 net new jobs in September. This period represents the first substantial back-to-back job gains in construction since the economic expansion got under way, and appears to confirm a modest recovery in housing and construction activity. On the service-providing side, trade, transportation, and utility firms added 2,900 new workers to their payrolls in October, after cutting a significant number in August and September. This segment remained one of the state's best performers over the past 12 months, accounting for more than 30 percent of North Carolina's job growth during the period. Employment in the information and financial activities industries was up slightly. On the down side, the professional and business services sector lost 3,400 jobs in October, giving back nearly a third of the employment gains of the prior four months. About 1,800 were shed in the private education and health services segment. Employment in both of these industries remained well above year-earlier levels. Government employment, which has been quite volatile throughout 2012, was off by about 900 in October, and down 3,800 over the year. Most of the government job losses (over the month and over the year) were concentrated at the state level. In fact, after October's decline, state government employment in North Carolina was at its lowest level since February 2006.
North Carolina's seasonally adjusted unemployment rate decreased three-tenths to 9.3 percent in October — its lowest level since February 2009. The number of unemployed workers fell during the month as employment increased faster than labor force participation. About 440,000 of the state's 4.7 million workers were unemployed in October. Our Carolinas business activity index edged higher in November, suggesting that the region's modest economic recovery continued, but the labor demand indicators remained weak, indicating that firms were still reluctant to add workers to their payrolls.