Employment Fell in South Carolina as the Region's Economy Remained Soft
Labor market data in South Carolina were mixed in October, although overall conditions remained weak. Employment in the state declined for the third time in four months, but the unemployment rate improved materially for the first time since March. Meanwhile, results from our own Carolinas Survey of Business Activity survey suggested that weak labor market conditions in the region persisted into November.
South Carolina's seasonally adjusted payroll employment declined by 2,300 in October — the third decline in the past four months. (Estimates for September were revised upward to show an increase in payrolls rather than the decrease that was initially reported.) While government employment continued to be a drag on the state's economy, the recent weakness was the result of a slowdown in private-sector job creation. Firms in the private sector created just 200 net new jobs in October, according to the state's Department of Employment and Workforce. Leisure and hospitality and financial services firms led the increases over the month. Manufacturers added back 400 workers after shedding 200 in September. Manufacturing has been one of the more reliable contributors to job growth in the state as employment in the sector increased in 12 of the 13 months ending in October. The weakness in the private sector was concentrated in construction and professional and business services. Local government employment was off by 2,600 in October, accounting for all of the jobs lost in the government sector. Regionally, most MSAs experienced very modest month-to month increases, although the Greenville MSA (one of the state's top performers) lost jobs for the second month in a row.
Since last October, employers in South Carolina bolstered their payrolls with 15,000 net new jobs. Since the recovery got under way, employment in the state increased by about 33,000, leaving it roughly 130,000 shy of its pre-recession peak. Private-sector employment was up a little more than 20,000 over the year, but the government shed 5,100 jobs (the vast majority of which were in local government). It is quite remarkable that manufacturing has led the way in South Carolina. Factory jobs increased steadily over the last year and are up by nearly 11,000 — far outpacing job creation in the next closest industry, education and health services, which added 4,000 net new jobs. The professional and business services sector, which has been a major driver of employment growth in the nation as a whole, saw only modest job gains in South Carolina. With the exception of Sumter, payroll employment was up in every MSA across the state, with the largest gains coming in the Columbia area.
South Carolina's seasonally adjusted unemployment rate fell to 10.5 percent in October from 10.9 percent a month earlier. The increase in the number of South Carolinians who reported themselves as employed exceeded an increase in labor force participation, accounting for the improvement in the unemployment rate. Turning to our Carolinas Survey of Business Activity, the important labor demand indicators (number of workers and average hours) continued to decline in November, suggesting less hiring among responding firms. This softening occurred despite a rise in the headline current conditions index, which pointed to a pick-up in business activity.